The remuneration information collected from Workforce Data for senior leader remuneration and pay covers average salary changes and ratios, as well as chief executive remuneration and disclosure information.
Average salary changes by seniority
In 2021, the average base salary for the Public Service workforce as a group increased by 3.7% (we use base salary because we don’t collect total remuneration in Workforce Data.) The increase for non-management staff was 4.3%, compared with 0.6% for management staff. By tier, salary movements included a 0.6% drop for tier 2 managers, a 1.2% increase for tier 3 managers and a 0.9% increase for other managers.
In response to COVID-19, all Public Service chief executives adopted a voluntary 20% reduction in pay, effective for 6 months from 11 May 2020. The reversal of this reduction in the latest year has resulted in incumbent chief executives seeing a 19% increase as of 30 June 2021.
The latest changes follow a 7.6% increase in 2019, which was due to a change introduced to chief executive remuneration packages (an adjustment rolled into base salary to account for the removal of performance, or at-risk payments which were outside of base salary). The chart below shows estimated average size of these at-risk payments that sit above the base salaries for the preceding years.
Average salaries for chief executives also tend to be volatile over time, because of the small number in the group and the effect of compositional changes due to arrivals and departures each year. The sections below have more detailed information on chief executive remuneration.
Average salary ratios
The chart on the first tab of the visualisation below shows the ratios of average base salary for the 4 management levels compared to non-management staff. These ratios have been quite stable over the last 6 years, except for the chief executive group. As of 30 June 2021, the average base salary of incumbent chief executives in the Public Service was 5.4 times that of non-management staff.
This ratio had been trending downwards, once you take into account the change introduced to chief executive remuneration packages in 2019, with an adjustment rolled into base salary to account for the removal of performance or at-risk payments (which were outside of base salary). The effect of this is estimated in the chart below. The sharp drop in 2021 was due to Public Service chief executives adopting a voluntary 20% reduction in pay, effective for 6 months from 11 May 2020. The increase from 4.7 to 5.4 was due to the reversal of this reduction.
The ratios for other management levels were:
- tier 2 manager at 3.6
- tier 3 manager at 2.5
- other managers at 1.6 times relative to non-management staff.
When comparing the average base salary of chief executives to the rest of the staff (including managers) the ratio was 4.9. This ratio has been trending downwards in recent years.
These Public Service chief executive and staff pay ratios are modest compared to the market ratios of publicly listed New Zealand firms. A 2021 Stuff survey of the largest 20 companies in the benchmark NZX50 found that chief executive pay was between 16 and 40 times worker pay.