Those highly paid public servants: Can we please hang on to them?

I don’t have the slightest problem with the highest-paid public servants in New Zealand. I review the annual reports of the organisations they work for on a regular basis, and have done for many years. I see the numbers regularly increasing, sometimes getting into seven figures (yes, over a million dollars). In addition, I know these figures are unlikely to change in the foreseeable future.

You may be wondering ‘is this the norm for public sector?’ But I am of course talking about the medical specialists (surgeons, etc) at our DHB’s. Having a heart condition, I admit, does colour my judgement somewhat but these rates really only apply to those working in this field – at the moment.

This group never really makes the headlines for the simple reason that pay in the medical profession doesn’t generate any controversy. These are high levels of pay that people are less concerned about.
And just for the record, senior managers at the DHB’s usually start to appear on the salary ranking tables from around number 15 to 20, relatively well down the list.

The above comments do shine a different light on actual high pay levels as distinct from perceived high pay levels. The general comments in the media around high levels of pay focus on CEOs ad nauseam and fail to look at the bigger, or actual, pay landscape in New Zealand.

Let’s note a few other groups that are seriously well paid. Sportspeople, now that we have hit the professional era, entrepreneurs, acting/media (deliberately lumped together), “good” people in business also generate less comment even though their pay levels can be astonishing by any measure. (An $800,000 pay package for reading the news has always intrigued me – show me the camera!)

Also generally below the radar, mainly because the information is less available, are other highly paid professional groups like engineers and accountants.

So why the focus on CEOs? Probably because they are seen as benchmark roles and their pay levels are linked accordingly to the general state of the nation and perceptions of fairness. Overseas trends influence us strongly and the spectacular remuneration levels of Fortune 500 organisations and similar groups in Europe and latterly Asia provide for great headlines, especially when the particular organisations are in trouble or large incentive payments are made (often both together to complicate the issue for those concerned).

Compounding the issue locally are a few commentators who bang away at the basic statistics produced in listed company annual reports drawing tenuous and value-laden judgements from them for purposes unknown to me.
A more analytical and measured approach is required on understanding high levels of pay and executive pay in New Zealand. A wide range of data is available on CEOs in both the public and private sectors and it is possible to measure trends in a broader manner for CEO roles to better understand patterns.

Our latest CEO Survey is just such a measure and I note it shows movements of 2.6 percent in base salaries for these positions. Not a statistic to get excited about and within the range of our overall database movements.
It won’t make the news but it is real data and tells us what is actually going on.

John McGill is the chief executive officer at Strategic Pay.

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