Monday 20 February 2017 04:02 PM
English criticises Super Fund CEO's pay rise, puts directors on notice
By Sophie Boot
Feb. 20 (BusinessDesk) - Prime Minister Bill English has criticised the board of the New Zealand Superannuation Fund for
lifting its chief executive's pay 36 percent last year, and suggested there could be a shakeup in how CEOs of the
largest state entities are paid.
At a press conference this afternoon, English said he was disappointed with the board's decision to lift Adrian Orr's
salary over $1 million in 2016. As finance minister, English opposed the raise as "too large in the current economic
climate" and suggested a 2.5 percent hike instead. The prime minister said the raise would be taken into account when it
comes to reappointing board members.
"The discussion we've had about pay is no reflection on the performance of the fund or the professional and managerial
competence of the board," English said. "They're public entities, and the government has a view about large remuneration
increases. The board's taken a different view. I think any board who takes a different view when it's a 100 percent
subsidiary takes risks about tenure."
As finance minister, English said he had engaged in an "unsatisfying annual haggle" with the boards of large public
organisations like the Super Fund, that were "a bit overenthusiastic" about how much their CEOs should be paid.
He nominated the Reserve Bank, Accident Compensation Corp and Housing New Zealand as others in the category of very
large government entities where chief executives' pay could be an issue.
"There's been pressure on all these salaries - I think it would be better to find a more stable process for these very
significant appointments. These are all $20 billion-plus organisations, much larger than almost all of our private
sector organisations, but they're still public organisations," English said. "It may be better to, for instance, set a
level at the start of an appointment and leave it at that. We've got four of these very large public organisations where
this issue keeps coming up, because they're benchmarked against a standard that's not the local standard."
There was also no shortage of applicants for their leadership, he said.
English said there was an opportunity to get a "long-term view" with the pending appointment of a new Reserve Bank
governor. Earlier this month, current governor Graeme Wheeler announced he won't serve a second term when his expires in
September and will be followed out the door by his deputy, Grant Spencer, in March next year after filling the position
on a temporary basis while the next government hunts out a replacement.
(BusinessDesk)
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