Components of chief executive remuneration package
The State Services Commissioner (the Commissioner) takes a total remuneration approach to chief executive remuneration packages, which means that all benefits for both Public Service and Crown entity chief executives are valued as components of their remuneration package as follows:
- base salary
- performance components for Public Service chief executives are set at 15% of base salary and paid at the discretion of the State Services Commissioner
- the Commissioner's guidance for performance components for Crown entity chief executives is that they are between 10 - 15% of base salary, but the actual proportion will vary as agreed between the chief executive and the board as the employer. In addition, there are a small number of chief executives with long term incentive performance components. These are typically linked to the successful management of significant funds over a period of time.
Other components that may be included are:
- employer contributions to superannuation, including KiwiSaver
- annual leave - any additional leave in excess of 20 days per annum and organisation leave days (usually the days between Christmas and New Year) is valued into a chief executive's remuneration at 0.4% of total remuneration per day
- vehicles are no longer offered to newly appointed Public Service chief executives
- Crown entity chief executives may have the option of a vehicle if their employer agrees. A vehicle is valued at 45% of the purchase price (including GST and on-road costs), with a maximum purchase price of $46,000 and based on a three year/60,000 kilometre replacement cycle. This value includes all fixed costs and Fringe Benefit Tax. It assumes full private use, but running costs incurred on holidays or extended travel are expected to be covered by the chief executive.
- Other components such as medical insurance are not common, and are valued into a chief executive's remuneration at the cost to the employer.
See the latest annual remuneration report here .
End of term payments
The amount and type of payments made to each chief executive varies, depending on the chief executive's individual terms and conditions of employment. Not all chief executives are entitled to or receive end of term payments. For those that are entitled to any payments, they may be comprised of one or more of the following:
- as for any employee, payments made to a chief executive on their last day of duty primarily relate to the payment of annual leave not taken
- if a chief executive is a member of a superannuation scheme, payments may include employer superannuation payments owing on end of year payments
- if it is not possible to give a chief executive the requisite amount of notice of termination provided for in their employment agreement they may be eligible for a payment of salary in lieu of the notice period
- some chief executives are also eligible for a 'recognition of service' payment. This was available to Public Servants prior to legislative change during the 1980's but has not been offered to Public Servants for over 20 years. However, if a chief executive is a long serving Public Servant who has been receiving the entitlement, the Commissioner has continued to recognise the entitlement.
If a newly appointed chief executive is required to relocate as a result of their appointment to the role, they may receive reimbursement of relocation expenses incurred. Relocation expenses are negotiated on a case by case basis, and are generally capped at a maximum amount based on an estimate of the actual and reasonable expenses incurred.
Relocation expenses vary according to the specific circumstances of the chief executive but may include:
- the cost of airfares for the chief executive and his/her family to the location of the role
- accommodation for up to eight weeks on arrival
- shipping of household effects or the purchase of household furniture and effects
- if applicable, the expenses that the chief executive incurs obtaining a visa.
Actual relocation expenses reimbursed to Public Service chief executives are disclosed annually in the SSC Annual Report.