7 September 1999

Remuneration clarified

Reserve Bank Governor Don Brash today corrected recent media reports regarding his remuneration.

Dr Brash commented: "In recent weeks, there has been public debate about the remuneration of some Chief Executives in the state sector, and comparisons have been made with my salary. Those comparisons have been incorrect, being based on what is now out-of-date information in the Reserve Bank's 1998 Annual Report.

"For the record, since 1 September 1998, my total annual remuneration (including salary, value of a motor vehicle provided, superannuation, fringe benefit tax, and so on) has been $485,000. This was determined by the Treasurer in December 1997, at the time of my re-appointment for a third five-year term, based on the advice of the Board of the Reserve Bank. That advice was based on an assessment of remuneration paid to people carrying comparable responsibility elsewhere in the New Zealand economy.

"Prior to that, my total annual remuneration was $350,594, and this was unchanged throughout my second five-year term as Governor, as explained in the Bank's 1998 Annual Report.

"As background, my remuneration was unchanged in large part because, when my employment contract for that second term was negotiated, the then Minister of Finance, on the advice of the Board, placed a particular premium on my fully completing that term. To provide an incentive for this to happen, it was resolved that any annual adjustments of my salary, reflecting my performance and the difference between $350,594 and an assessment of market-place remuneration, would not be paid until I fully completed that second term. This was to be a lump sum payment, paid only on completion. As will be recorded in the Reserve Bank's 1999 Annual Report to be released shortly, that payment, of $282,000, was made in early September last year, and represents the sum of five successive annual deferred payments.

"The Treasurer has since made the judgement that a five year fixed rate of remuneration, with a possible lump sum payment at the end, is no longer appropriate. Thus, during my third term as Governor my salary is subject to the same annual reviews as other Reserve Bank employees, except that in my case decisions continue to be made, as they always have been, by the Treasurer," Dr Brash concluded.

For further information contact
Paul Jackman
Corporate Affairs Manager
Ph 04 471 3671, hm 04 938 8177, pager 026 105 085, Email jackmanp@rbnz.govt.nz