Escalating CEO pay ‘not sustainable’
The head of the public sector has publicly shamed Crown entity boards that pay inflation-busting pay rises to chief executives.
State Services Commissioner Peter Hughes released the annual report on top-level pay across the public sector yesterday.
For the first time the report names boards that ‘‘gave remuneration increases above recommended levels’’.
These were the Guardians of New Zealand Superannuation, ACC, and Crown-owned certification company Telarc.
Hughes also warned the directors of the boards that the moves could see them replaced.
‘‘Crown entities who choose not to follow State Services Commission advice with respect to the chief executives’ remuneration are now identified in this report. This information can inform ministers’ decisions about the tenure of board members,’’ Hughes said.
It is the first time the rift between Hughes and ACC chairwoman Dame Paula Rebstock has been publicly revealed.
The ACC board gave its chief executive a $20,000 pay increase in the 2016-17 year, following a $50,000 increase in 2016.
ACC confirmed that the commission recommended a 1 per cent rise, but the board had approved one almost three times as large.
Via a spokesman, Rebstock issued a statement praising ACC’s performance under chief executive Scott Pickering. Her statement did not mention the tenure threat.
More generally, Hughes warned the recent increases in top public sector pay had to stop.
‘‘The upward trajectory of chief executive salaries in the state sector … is not sustainable and it’s time for change.’’