State bosses’ pay average takes a trim

Gabriel Makhlouf was the highest paid state sector chief executive last year, despite leaving his Treasury job in June under fire.

The State Services Commission has released its annual senior salary report that shows chief executives of government departments got an average 1.2 per cent pay rise in the year to June this year. However, the actual amount they earned dropped 4.3 per cent to an average of $478,000, down from $500,000 in the previous year as the commission moves to trim costs.

Makhlouf earned $681,000 before leaving to become governor of the Central Bank of Ireland. Shortly before he left, he was plunged into controversy after a Reserve Bank information leak ahead of the Budget.

The next biggest earner was Inland Revenue Commissioner Naomi Ferguson at $657,000. She is now the only chief executive earning above $650,000, down from three last year, the commission noted.

Keen to keep spending down, the commission’s remuneration rate fell behind chief executives in the broader public sector (up 2.3 per cent) or the private sector (2.9 per cent).

State Services Commissioner Peter Hughes has previously said chief executive pay packets were ‘‘unsustainable’’ and has since axed performance pay, appointed chief executives at the lower end of salary ranges and taken a conservative approach to pay reviews. However, he expected modest average increases to occur each year ‘‘which is reasonable’’.

The report shows the highest paid Crown entity boss is Matt Whineray, head of the NZ Super Fund. He is paid $1,065,000, followed by ACC chief executive Scott Pickering ($841,000).