NEW ZEALAND
The New Zealand Government has ended performance payments to senior Public Servants in an effort to slow the growth of their salaries.
However, a Cabinet paper published online shows some Chief Executives may ultimately be paid more.
Until now, Chief Executives have been paid a base salary plus an “at-risk” component of 10 per cent which could be docked, but rarely was.
They could also receive a “discretionary performance payment” of up to 15 per cent for exceptional performance.
The new arrangement rolls the “at-risk” sum into the base salary and scraps the bonus.
In return, the Chief Executives will receive an extra week’s paid holiday and have their remuneration reviewed every year.
“The potential remuneration available as a result of the removal of performance pay will decrease,” the Cabinet paper said.
However, the paper also shows Chief Executives who would have previously missed out on a performance bonus will be better off.
The document provides an example of an “average Chief Executive” earning a base salary of $NZ400,000 ($A364,000) plus an at-risk payment of about $NZ45,000 ($A41,000).
A 15 per cent bonus and a 10 per cent pension contribution bring the total remuneration package to roughly $NZ545,000 ($A496,000).
However, if the Chief Executive didn’t meet the criteria for a performance bonus, he or she would be paid approximately $NZ485,000 ($A441,500).
Under the new system, including the value of the extra leave, the same Chief Executive will receive about $NZ504,000 ($A459,000).
Minister for State Services, Chris Hipkins (pictured) said scrapping bonuses would put downward pressure on Chief Executives’ pay.
“We acknowledge that the growth of those on the highest incomes… has been growing too fast, relative to the people who work at the lowest levels of pay in the Public Service,” Mr Hipkins said.
State Services Commissioner, Peter Hughes has tried to rein in Chief Executives’ pay since his appointment in 2016.
He has made a point of re-appointing Chief Executives at lower pay and taking a conservative approach during remuneration reviews.
Wellington, 25 August, 2018
