No resignation over Super pay increase

‘‘That’s just really not acceptable for a state sector organisation – it’s not right and it’s a slap in the face to our members.’’ PSA national secretary Glenn Barclay

The chairwoman who signed off a 36 per cent salary increase for New Zealand Super Fund boss Adrian Orr won’t offer to resign, despite Prime Minister Bill English suggesting heads should roll over the decision.

Orr received the pay rise last year, taking his salary over $1 million despite objections from both English and the State Services Commission (SSC).

On Monday, English warned that Guardians of New Zealand Superannuation board members who approved the pay increase – which ended up as 23.4 per cent, but could have been as high as 35.6 per cent had Orr fulfilled performance criteria – could lose their positions as a result.

However, chairwoman Catherine Savage said she would not offer to resign over the decision, despite expecting the disagreement over Orr’s pay to continue.

While the fund believed Orr’s salary should be compared to ‘‘the market’’, the SSC’s position was that it should be benchmarked against other public sector salaries.

‘‘Should that continue into the future, that will continue to be a difference,’’ Savage said.

When she met English to discuss the matter, her position as chairwoman was not mentioned and she had no plans to offer to resign. ‘‘We’re focused on what we believe is best for the fund and hence our decision.’’

Savage’s term as chairwoman is set to end in September 2019.

PSA national secretary Glenn Barclay said the size of the increase was ‘‘pretty amazing’’, given the low pay rises for ordinary workers in the public sector.

‘‘Our members in the 2015/16 year ended up with pay increases in the region of 2 per cent on average, and he ends up with a 23 per cent increase – that’s just really not acceptable for a state sector organisation, it’s not right and it’s a slap in the face to our members.’’

Barclay said the board’s argument that Orr deserved the increase due to the complexity of his role did not hold up when compared to other public sector jobs, such as mental health crisis team members and Child Youth and Family social workers.

‘‘Those for example are hugely complex and stressful jobs, who get nothing like these kind of figures, and certainly nothing like this type of increase.’’

Felicity Caird, of the Governance Leadership Centre at the Institute of Directors, said the boards of state sector organisations had to juggle the ‘‘mismatch’’ of holding onto their chief executive in a competitive environment, while taking into account the expectations of the Government and taxpayers for fiscal restraint.

‘‘That sort of dimension brings in a whole lot of debate and scrutiny which you might not get in other organisations like a private company.’’

While it was the right of a shareholder to take a view on directors’ decisions and whether they should be reappointed, Caird said ‘‘playing it out in the media like this’’ would make life difficult for the Guardians’ board.

Savage has defended the board’s decision, saying Orr’s salary was ‘‘fair, competitive and appropriate given the nature and complexity of the role’’.