Consultants question salary assertions

Press, 8 May 1985, Page 49

Consultants question salary assertions

PA Wellington Assertions that salaries for top executives rose between 20 per cent and 30 per cent since December are disputed by two Well-ington-based personnel agencies. The assertion came from Auckland recruitment agents who said some of the top six companies were paying chief executives more than $150,000, with a significant number of others above $lOO,OOO. Specialists in the financial and computer industries were starting to command similar six-figure salaries, they said. The chief consultant in Wellington for PA Management Consultants, Mr Richard Harford, said that while some executives earned more than $lOO,OOO a year "it must be remembered that for some of these the base salary is lower and much of the total figure is made up of performancerelated earnings.” PA Management Consultants produce a comprehensive six-monthly and yearly

survey of salaries covering about 500 companies. Mr Harford said it was impossible to suggest that top-bracket salaries have risen 30 per cent to 50 per cent. Survey results for the year to March, 1985, showed that salaries increased on average by just under 14 per cent, compared with 4.6 per cent and 7.7 per cent for 1984 and 1983 respectively. ■ “There are no surveyfigures for the period from the end of the wage freeze, but the average increase for the top executive will certainly be less than 14 per cent until March,” he said. Mr John Bromley, a director of Management Resources, said that salary packages were increasing in high-profile positions such as computers and merchant banking, but it was simply a question of supply and demand. “Scarce commodities demand high prices in any free-market economy. I do not believe managements have opened the flood gates on salaries across the board; in fact they are showing

commendable restraint as evidenced by the lower-than predicted rise in industries,” Mr Bromley said. He felt most employers were trying to keep around the 7 per cent increase mark. “The unknown factor we will be watching with interest is the effect of the fringe benefit tax,” he said. “Early indications are that employers are very wary of the extra tax that they will be required to pay on benefits and are relying on Mr Douglas (the Minister of Finance) to keep his promise to reduce tax rates in the next Budget across all salary ranges,” said Mr Bromley.