One of the objectives of redesigning the remuneration approach has been to create a stronger and clearer link between chief executives' performance expectations and remuneration.
To achieve this, we have changed the way chief executive Total Potential Remuneration is structured, which has increased the proportion of a chief executive's remuneration that is now at risk.
These at risk payments are clearly linked to a chief executive's performance in delivering their agency's core services and their system-wide stewardship role through a set of performance expectations that are common to all chief executives.
There are two components to the at-risk proportion of a chief executive's pay:
- the first (called ‘Earn Back') is up to 10% of Target Remuneration and is linked to a chief executive's performance in delivering against expectations.
- the second (called exceptional ‘Performance Payment') is up to 15% of Target Remuneration and is linked to exceptional performance against system-wide stewardship expectations. The bar for receiving this payment has been set high.
Payment of some or all of the at-risk components is considered each year as part of the chief executive end of year performance review and is at the Commissioner's discretion. The changes to the way chief executive pay is structured have been introduced within the previously established appropriation for chief executive remuneration.