Public Sector CEOs earning more than private CEOs
March 29th, 2007 at 2:37 pm by David FarrarI was very surprised to see that public sector CEOs are now earning more than private sector CEOs. Private Sector CEOs are ultimately responsible for the most crucial and hardest part fo being in business – how to generate revenue. One can be a world class employer, risk manager, policy developer, technical analyser etc but your company goes bankrupt if you can produce a product or service which people will voluntarily pay for.
I’ve employed and been involved with setting remuneration for several CEO type roles in the private sector. And if they do not have revenue generation as part of their duties, they get assessed at a lower rate than an identical job which does have to generate money to survive.
Now I am not saying public sector CEOs are getting paid too much. In fact some of our public sector CEOs such as MFAT’s Simon Murdoch are world class, and we need to retain them. I think it probably reflects that private sector CEOs are generally underpaid compared to their counterparts in Australia.
What surprised me in the article was the number of public sector CEOs – a whopping 211 of them. That is far too many. John Luxton once advocated that one could reduce the public sector to around five super-ministries. Now that may be too ambitious, but surely we can manage with less than 211 public sector CEOs. At an average of $255,000 each, we are paying $53,805,000 just in CEO salaries.
Related posts:
- And no pay rises for state sector CEOs
- 20% higher pay in the public sector
- Public Sector Pay Rates
- The private sector
March 29th, 2007 at 4:10 pm
Shocked but overly, especially considering the %age of GDP we spend on public service.
Do you have the figures or a link to them available?
Also I would be interested in the historical figures for the last 15-20 years – number of public CEOs and wage comparison to their private counterparts.
And even of more interest would be to see which ministries the CEOs were hired to, i.e. new pork-barrel ones or existing ones where growth was actually necessary.
Vote:March 30th, 2007 at 6:13 am
And at the one in Cashel St. with 1,000 employees (!), they will be paying the highest rent per square metre in Christchurch!
Vote:March 30th, 2007 at 8:11 am
In IRD’s defence, they really wanted to stay in Henderson House, but were unable to because Dave Henderson terminated their lease as a form of revenge. While I did enjoy the concept of buying the building IRD was in and kicking them out, as a taxpayer I guess I get to wear the cost of that now.
Cheers, Chris W.
Vote:March 30th, 2007 at 11:47 am
“It really makes me sick to see how much IRD is being pumped up by Labour to be more and more intrusive in peoples lives and take more and more of their hard earned income for the State.”
- Tax rates have not gone up in 7 years, so I assume you are tlaking about more active enforcemnt of tax law by the IRD. If the IRD is closing tax loopholes and excercising more rigorious enforcment so that jokers aren’t dodging tax, that’s a good thing – its equal and fair enforcement of the law and means the rest of us don’t carry the cost of tax cheats.
Vote:March 30th, 2007 at 4:12 pm
Many of the State CEOs run what are essentially monopolies or near monopolies Their hardest task is keeping the Minister and the govt appointed director lackys happy.
Vote:Put them into a competitive industry in the private sector and see how they perform Not
April 1st, 2007 at 6:03 pm
The figures provided by Sheffield in their commentary to the media are rather misleading, as these are averages which do not accurately refelect the true job size of CEO positions. The actual survey provides a comprehensive analysis of CEO remuneration levels by a number of metrics, including employee numbers (total for the organisation), revenue, industry and job size. When comparing public sector CEO remuneration to private sector CEO positions equivalent in terms of job and organisational size, there is a significant difference, with private sector CEO remuneration far above that of the public sector.
Whilst I believe that the top tier or public sector CEO’s, such as the IRD Commissioner, and Peter Hughes at MSD, are on a level of remuneration in excess of their relative worth, this article is certainly misleading and is not adding value to public debate.
Vote: