Super Fund fights for right to set chief executive's pay

Super Fund board chair Catherine Savage says the savings vehicle should be exempt from a law that would mean crown entities need the State Services Commissioner's consent for CEO pay.

The Super Fund is fighting for the right to set its chief executive's pay after two years of controversy over the issue.

How much the boss of the Government's saving vehicle earns has courted criticism from successive Finance Ministers – reaching a crescendo when former Super Fund chief executive Adrian Orr snared $1.03 million in 2017.

Prime Minister Jacinda Ardern and State Services Minister Chris Hipkins, in February, announced a crackdown on public sector bosses' pay and board conduct in the form of the State Sector and Crown Entities Reform Bill.

Under the bill, the boards of crown entities would need State Services Commissioner Peter Hughes' consent for public sector CEO pay, effectively enabling him to set the pay and conditions. Hughes would also have the power to set a code of conduct for crown entity boards.

The Super Fund, which is charged with investing and building up funds to help shoulder pension payments, is fighting to be exempt from the law.

The Fund has more than $38 billion of assets under management.

Catherine Savage chairs the Super Fund board (who call themselves guardians) and told Parliament today that the savings vehicle should be exempt from the law.

"Like a state owned enterprise, the guardians and fund has a commercial focus. In order to be successful in the commercial world the Guardians must operate at arm's length from the Crown," Savage said.

"While we respect the Government's right to be consulted, and are committed to transparency and accountability regarding our decisions, it is important that the final decision over CEO appointments and remuneration rests with the board," she said.

"All New Zealanders have an interest in the long-term success of the NZ Super Fund, given the important role it will play in helping to pay for superannuation payments in the future.

"While based in New Zealand, the Guardians invests globally, and it is imperative that we are able to attract and retain the very best executive and other talent needed to sustain the Fund's success," she said.

"Removing the fundamental responsibility for appointing and remunerating the CEO from the Board, as provided for in the proposed Bill, undermines our accountability for delivering results. It also opens up the possibility of political interference and short-term decision making."

The Super Fund CEO's pay came from the fund itself and not Parliament's budget.