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Remuneration movement guidance for 2014/15

State sector chief executive remuneration is lower on average than remuneration for equivalent sized private sector roles. Public Service chief executive remuneration is lower on average than remuneration paid to chief executives in the wider State sector with similar sized roles.

The Commissioner takes a conservative approach around increases to remuneration for Public Service and Crown entity chief executives. However, there are instances where larger increases to remuneration are supported by the Commissioner, for example, where there has been a significant increase in a chief executive's job size.

Crown entity chief executive remuneration is set by Crown entity boards after consultation with the Commissioner. The Commissioner provides all board chairs with guidance when considering increases to CE remuneration which is consistent with remuneration movements in the broader State sector workforce.  This indicates the Commissioner's expectations for reasonable increases, taking into account individual performance, and a chief executive’s position in a remuneration range.  The guidance, summarised in the table below, indicated increases for CEs meeting expectations of between 2% and 3%.

  Crown Entity Chief Executive Matrix 2014/15
Position against range midpoint
< 90% - 95% 96% - 100% 101% - 105% 106% - > 110%

Performance Rating

Exceeded expectations 3.5% 3% 2.5% 2%
Met expectations 2.5% 2% 2% 1.5%
Developing in the role 2% 1.5% 1% 1%
Not meeting expectations 0% 0% 0% 0%

The Commissioner uses a similar method for determining increases to Public Service chief executive remuneration which is also set with a view to the movements in the rest of the State sector workforce. The approach used for determining Public Service increases in 2014/15 is summarised in the table below.

  Public Service Chief Executive Matrix 2014/15
Position against zone effective midpoint
<90% - 96% 96% - 100% 100% to 104% 104% - >110%

Performance Rating

Exceeds expectations 5% 4% 3% 2%
Exceeds in some expectations 4% 3% 2% 1%
Meets expectations 3% 2% 1% 0%
Partially meets expectations 2% 1% 0% 0%
Does not meet expectations 0% 0% 0% 0%

This is structured slightly differently to the guidance for Crown entity chief executives, as it recognises that Public Service chief executive remuneration lags behind that of Crown entity chief executives in similar size roles. However, steps to align the Crown entity and Public Service guidance more closely have been taken as part of the 2015 review process.

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