Statement from State Services Commissioner Peter Hughes
The Guardians of New Zealand Superannuation, a Crown Entity operating as part of the State Services, has today publicly released information on its decision to increase the Chief Executive's 2016/17 remuneration.
Crown Entity boards make decisions on the remuneration of their Chief Executives.
The State Services Commission provides annual guidance on remuneration for Crown Entity Chief Executives and boards are required to consult me before making final decisions. This guidance is based on the Government's pay expectations for the State Services.
My expectation on pay for Public Service leaders is one of fairness. It's a balance between being fair to individual chief executives, recognising the jobs they do, and being fair to the taxpayers who pay the bill.
In this particular case, my advice to the board was that an increase of the size proposed was not justified. The board made its own decision and did not follow my advice. I acknowledge that this year's increase was closer to recommended levels than the previous year's increase in total potential remuneration of 35.6 per cent.
I expect public transparency around the remuneration for public sector chief executives and that includes Crown Entities. Boards of Crown Entities are responsible for and accountable for their decisions. When board decisions on chief executive remuneration are not consistent with my advice I will ensure that it is transparently recorded in the annual disclosure of State sector chief executive remuneration. This will commence with this year's State Sector Senior Pay report.
Because the Guardians of New Zealand Superannuation has decided to make this matter public now, before the annual disclosure of chief executive remuneration, I have today released correspondence that shows the Commission did not support the board's decision.
I do not accept the argument that Crown Entities such as Guardians of New Zealand Superannuation should be able to make decisions free of any public sector oversight or accountability. This is a public agency investing public money for the good of the public. And the Chief Executive's remuneration is paid by taxpayers. Crown Entities have a strong element of public service attached to their work and executives should reasonably expect to earn less than in a private sector company.
Related resources: (Collected in the attached PDF)
- Letter from State Services Commissioner Peter Hughes to Guardians of Superannuation dated 28 July 2017
- Letter from SSC to Guardians of New Zealand Superannuation dated 26 September 2017
- Internal SSC Memorandum dated 28 August 2017
- Email from SSC to Guardians of New Zealand Superannuation dated 28 April 2017.
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