The average pay for the chiefs of New Zealand's top listed technology companies has jumped and the fact there are now eight firms in the latest Business Herald pay survey is indicative of a shift in the business sector, say commentators.
When the pay survey first began for the 2004 financial year, just two technology companies made the survey - Telecom (now Spark) and Fisher & Paykel Healthcare.
In the latest survey Diligent's Alessandro Sodi was the top paid technology company chief executive, sitting at sixth overall at $3.1 million. His 2014 pay included US$1.4 million of 'replacement remuneration' to compensate for cancelled options.
Forsyth Barr analyst Blair Galpin said there were more technology companies in the pay survey than in 2005 but that did not necessarily mean there were more such firms overall. "You would expect there would be given there has been more interest in technology and more opportunities to grow now anyway, but it's more that they are more visible and that we have more listed tech companies," Galpin said.
"I think it makes it easier for [technology companies] to get funding because people can look to the likes of Xero and say well they have achieved it, so I think companies have always believed they can [grow and be global] but now it's more a case that they're more likely to find investors that would also follow that belief."
Greg Shanahan, managing director of the Technology Investment Network (TIN), said the increase in listed technology companies in the pay survey reflected changes that TIN had been seeing, with the number of firms earning between $50 million and $100 million doubling between 2010 and 2014.
"There's a growing profile of larger technology companies so it makes sense that you'll see more of those companies on the NZX 50," Shanahan said.
"And there's a large number that are being listed on the stock exchange and using that funding to accelerate growth so the [pay survey] results are a natural consequence of those things."
Shanahan said statistics from the TIN100 report showed technology exports were increasingly important to New Zealand's economy with collective revenue from the companies surveyed increasing from $4.7 billion in 2006 to $7.6 billion in 2014, and export revenue increasing from $3.5 billion to $5.6 billion in the same period.
"I think it shows that the tech sector and, more importantly, tech export sector is becoming more of a mainstream business and people are seeing it less as a fringe high-risk investment and more something where there is solid opportunity for a capital gain," he said.
There may be more technology companies in the survey than ever before, however, there are also some significant names missing, including Datacom, Gallagher Group and Tait Communications - all of which have revenue of more than $150 million according to the TIN100, but are not listed so do not have to disclose pay figures. Average pay for technology chief executives has also increased, jumping 27 per cent from 2013 to 2014 despite there being just two technology companies in the top 15.
Callaghan Innovation chief executive Mary Quin said having good pay packets was important for the continued growth of New Zealand's tech sector.
"Because New Zealand tech businesses operate in a highly competitive global marketplace, a vibrant, growing tech landscape like ours needs to offer competitive salaries to attract and retain the best talent," Quin said. "By continuing to grow world-leading companies we can create more highly skilled jobs for New Zealanders."
There has been a trend over several years in the survey of technology chief executives earning less when compared with other sectors, highlighted by Orion Healthcare, Xero and Pacific Edge having the three lowest paid chiefs in the survey.
Often companies were founded as lean start-ups with more of an entrepreneurial focus and, according to Shanahan, had less of a hierarchical foundation.
"There is less of an ivory tower approach in terms of the culture because the CEO is more of a leadership position and has to attract the loyalty and effort of people right across the company to get them to come up with more innovative solutions," he said.
"So there's a more collegial atmosphere, I think, in tech businesses than you might find elsewhere with more corporate structures."
This trend has also been reflected overseas, most famously with Apple's chief executive Steve Jobs earning US$1 a year between 1997 and 2011 so revenue could all be reinvested back into the business.
Shanahan said he expected the number of tech companies in the pay survey would continue to rise.
"I certainly don't think that the rash of listings necessarily represents a bubble, these companies haven't listed on the strength of hype about their performance," Shanahan said.
"I think that the technology sector is definitely a larger part of the economy and the single most important macro economic part of that is the continued growth of the US economy and the forecasted depreciation of the New Zealand dollar against the US dollar," he said.
"If it continues it could be a huge boom for technology companies."
Hear Herald writer Hamish Fletcher discuss the latest CEO Pay Survey with NewsTalk ZB's Rachel Smalley here: