Public Sector CEOs earning more than private CEOs

I 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.