21 Feb 2017

Super Fund CEO's increase 'out of step' - State Services Commission

5:39 am on 21 February 2017

The State Services Commission will name and shame any government-owned entity that gives huge pay rises to its chief executive against its advice.

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Photo: 123RF

Yesterday it was revealed the head of the New Zealand Superannuation Fund received a 23 percent increase despite objections from the Prime Minister and the Commission.

Super Fund Chief Executive, Adrian Orr, at his desk

Adrian Orr received a 23 percent increase in pay last financial year. Photo: Supplied

Chief executive Adrian Orr's pay rose from $830,925.00 in 2014/2015 to $1,025,121.00 in the past financial year. Two years ago he received a $130,000 pay rise.

On the report that proposed the hefty increase, then Finance Minister Bill English wrote a note opposing the pay rise and said he would publicly state so if asked.

Bill English hand wrote his opposition to the pay rise at the bottom of the report.

Bill English hand-wrote his opposition to the pay rise at the bottom of the salary report. Photo: Supplied

Mr English recommended a 2.5 percent increase. The commission suggested 6 percent.

"I think any board who takes a different view when it's 100 percent subsidiary takes risks about tenure and that will be discussed when the appointments come up," Mr English said.

There should be a better process for these large public organisations than what he called an "unsatisfactory annual haggle", Mr English said.

State Services Commissioner Peter Hughes said the increase was significantly out of step and difficult to justify in a public organisation.

"I plan to set out in future disclosures whether a crown entity board has followed the advice SSC provides or has chosen to act independently."

Super Fund board chair Catherine Savage said the increase was the right decision. It was "fair, competitive, appropriate" and "not high compared to international peers".

However the Public Service Association (PSA) described the "massive" pay bump as "outrageous" and "a slap in the face" for public servants.

PSA national secretary Glenn Barclay said the average public servant got a roughly 2 percent pay increase over the same period.

"It sends a terrible message. Our members have been struggling for the last eight, nine years with limited pay increases. We've fallen behind the private sector generally."

The board's arguments did not cut it, Mr Barclay said.

"If we look internationally at the private sector, these big corporate roles, they've been paying themselves massive bonuses for years. And we know that was one of the major contributors to the global financial crisis and they're still doing it. We do not want our public sector organisations to be following the same line.

"I note that the chairperson of the board referred to the complexity of the role. How would she describe the complexity of the role versus a social worker who's dealing with highly stressed families or someone working in mental health?"

It has been been speculated that Adrian Orr may take over as Reserve Bank Governor when Graeme Wheeler steps down from the role in September.

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