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Remuneration data and analysis - Overall findings

This section provides summaries of median and average payments, and the relative percentage movements, from 2009 to 2010 for Base Salary, Total Remuneration Package (TRP) and Total Reward (TR) across all SES employees of participating agencies across the whole of the APS.

Base Salary

Base Salary represents full time equivalent annualised PAYG salary. It includes pre-tax employee superannuation contributions made by salary sacrifice and any additional salary sacrifice amounts for other benefits. It excludes all other cash components such as bonuses and allowances.

Table 2.1 – Base Salary Median and Average Values and Movements for SES 1, SES 2 and SES 3
Band Median Base Salary Average Base Salary
2009 2010 Movement 2009 2010 Movement
SES 1 $149,987 $158,277 5.5% $153,523 $160,972 4.9%
SES 2 $189,633 $200,726 5.8% $193,448 $205,288 6.1%
SES 3 $248,000 $261,910 5.6% $257,017 $267,877 4.2%

Median Base Salary remuneration movements range between 5.5 per cent and 5.8 per cent (a decrease of between 0.4 per cent and 4.1 per cent over the 2009 movements), while the average Base Salary movements range from 4.2 per cent to 6.1 per cent (a movement decrease of 0.8 per cent for SES 1 to 3.4 per cent for SES 3 employees).

Chart 2.1 provides an overview of the significant overlaps in Base Salary distributions between the SES classifications.

Chart 2.1* – Base Salary Distribution in 2010 for SES 1, SES 2 and SES 3


*All data items shown in the above chart reference the detailed summary tables in Appendix E.

Chart 2.1 shows an increasing progression between the SES classifications, with a median Base Salary difference between SES 1 and SES 2 of approximately $42,500, and approximately $61,200 between SES 2 and SES 3. This is slightly higher than the progression pattern reported in 2009, which displayed a progression between medians of approximately $39,600 from SES 1 to SES 2 and approximately $58,400 from SES 2 to

SES 3. Across the Base Salary range for each classification there are significant overlaps between SES grades, with the most highly paid SES 1 employees receiving as much, if not more, Base Salary as most of the SES 3 employees. SES 2 roles similarly overlap with SES 3.

The other main feature brought sharply into focus from Chart 2.1 is the narrow pay ranges from Q1 to Q3 at each SES classification. While the more highly paid employees overlap with the next highest SES classification, the Q1 to Q3 range (which covers 50 per cent of all employees at each SES classification) does not overlap and shows a clear progression from one SES classification to the next.

Total Remuneration Package

TRP represents the sum of:

  • Base Salary
  • superannuation (including Employer Productivity Superannuation Contribution (EPSC) amounts where applicable)
  • annual remuneration value of motor vehicles (including parking and FBT)
  • other fixed benefit items (including FBT where applicable).

TRP excludes business-related on-costs such as workers’ compensation premiums or payroll tax, or the reimbursement of business expenses.

Table 2.2 provides a summary of median and average TRP values and movements for SES employees from 2009 to 2010.

Table 2.2 – TRP Median and Average Values and Movements for SES 1, SES 2 and SES 3
Band Median TRP Average TRP
2009 2010 Movement 2009 2010 Movement
SES 1 $203,136 $210,175 3.5% $203,848 $210,459 3.2%
SES 2 $254,222 $262,680 3.3% $254,577 $264,364 3.8%
SES 3 $325,125 $335,335 3.1% $332,704 $338,619 1.8%

Median TRP remuneration movements range between 3.1 per cent and 3.5 per cent, with average movements ranging from 1.8 per cent to 3.8 per cent. The movements have increased slightly from the median TRP remuneration movements from 2008 to 2009, which ranged from 2.5 per cent to 3.2 per cent at the median and 1.8 per cent to 2.9 per cent for average TRP.

Chart 2.2 provides an overview of the distribution and spread of TRP for each SES classification.

Chart 2.2* – TRP Distribution in 2010 for SES 1, SES 2 and SES 3

*All data items shown in the above chart reference the detailed summary table s in Appendix E.

Chart 2.2 shows that the 2010 TRP data features a growing progression between the SES classifications, with approximate increases from the median TRP of SES 1 to SES 2 of $52,500, and $72,700 from SES 2 to SES 3. There are outliers representing more highly paid or lower paid employees at each band which continue to overlap as seen in Chart 2.1 for Base Salary distribution; however, the Q1 to Q3 range at each band does not overlap.

Total Reward

TR represents the sum of TRP plus actual bonus payments.

Table 2.3 provides a summary of median and average TR values and movements for SES employees from 2009 to 2010.

Table 2.3 – TR Median and Average Values and Movements for SES 1, SES 2 and SES 3
Band Median TR Average TR
2009 2010 Movement 2009 2010 Movement
SES 1 $207,730 $213,017 2.5% $209,490 $214,300 2.3%
SES 2 $263,461 $266,763 1.3% $262,850 $269,862 2.7%
SES 3 $336,029 $340,627 1.4% $342,648 $344,946 0.7%

TR median movements range between 1.3 per cent and 2.5 per cent, with average movements ranging between 0.7 per cent and 2.7 per cent. Compared to the movements from 2008 to 2009, the rate of growth in TR has decreased slightly, with median movements ranging from 1.7 per cent to 2.8 per cent, and average movements ranging from 1.5 per cent to 2.7 per cent.

Chart 2.3 provides an overview of the distribution and spread of TR for each SES classification.

Chart 2.3* – TR Distribution in 2010 for SES 1, SES 2 and SES 3

*All data items shown in the above chart reference the detailed summary tables in Appendix E.

Chart 2.3 reflects a similar pattern to previous charts, and shows a growing progression between the SES classifications, with an increase of ~$53,700 from the median TR of SES 1 to the median of SES 2, and an increase of ~$73,900 from the median TR of SES 2 to the median of SES 3. This progression is slightly higher than the progression between SES classifications at the TRP aggregate. As can be seen, the Q1 to Q3 range on a TR basis does not overlap between the bands.

Superannuation

Superannuation is defined as employer contribution plus the Employer Productivity Superannuation Component (EPSC) or the Superannuation Guarantee (SG). Mercer notes that, as at 1 July 2008, the Superannuation Guarantee Administration Act 1992 required employers to use ordinary time earnings (OTE) as the earning base to calculate their Superannuation Guarantee obligation.

APS employees are generally members of one of four superannuation funds (unless they have made their own superannuation arrangements). The funds and their abbreviations are described below:

  • Australian Government Employees Superannuation Trust (AGEST): this fund is for contractors and people employed for a defined period. Employer contributions are set at the statutory amount of 9 per cent for income levels up to the 2010-2011 statutory maximum of $168,880 per annum
  • Commonwealth Superannuation Scheme (CSS): this scheme is closed to new members, and the employer contribution (as a weighted average across participating agencies) is currently 21.4 per cent (including the productivity component of nearly 3 per cent)
  • Public Sector Superannuation Scheme (PSS): this scheme is also closed to new members, with the employer contribution (as a weighted average across participating agencies) currently set at 16.2 per cent (including the productivity component)
  • Public Sector Superannuation Accumulation Plan (PSSAP): employer contribution is set at 15.4 per cent, and the fund has been in operation since July 2005
  • Other: this is usually for employees who have chosen their own superannuation arrangements, including employees who self manage their superannuation.

Table 2.4 shows the employer superannuation contributions for each SES classification.

Table 2.4 – Employer Superannuation Contributions in 2010 for SES Employees
Band Minimum Q1 Median Q3 Maximum Average SD
SES 1 $12,576 $23,768 $26,671 $31,361 $79,915 $28,075 $6,573
SES 2 $0 $30,439 $35,731 $41,806 $69,023 $37,060 $9,221
SES 3 $29,995 $41,026 $48,041 $57,225 $93,048 $50,157 $12,419

In 2010, median superannuation contributions for SES 1 and SES 2 are higher than in 2009; however, median superannuation payments for SES 3 are slightly lower. Similarly, average payments are higher in 2010 at the SES 1 and SES 2 classifications, but lower for SES 3.

Table 2.5 provides a summary of salary for superannuation purposes as a percentage of Base Salary across the total sample of SES employees, according to superannuation fund membership and indicates the proportion of SES employees within each ‘Percentage of Base Salary’ range.

Table 2.5 – Salary for superannuation purposes as a Percentage of Base Salary, identified by Fund for SES Employees in 2010
Fund n Percentage of Base Salary (as at 31 December 2010) used as ‘Base Salary’ for superannuation calculation purposes
<70% 70-79% 80-89% 90-99% 100-109% 110-119% 120-129% 130+%
AGEST 17 0% 0% 12% 12% 76% 0% 0% 0%
CSS 923 0% 1% 9% 35% 47% 6% 2% 0%
PSS 1,418 0% 2% 10% 37% 46% 4% 0% 0%
PSSAP 182 1% 2% 5% 34% 54% 3% 0% 0%
Other 70 3% 0% 4% 13% 76% 4% 0% 0%

Table 2.5 shows that the majority of SES employees have a salary for superannuation purposes within ±10 per cent of their Base Salary, skewed towards the plus 10 per cent category.

A more detailed analysis of superannuation trends for each SES classification is provided in Section 3 of this report.

Motor vehicles and car parking costs

Motor vehicles are a traditional feature of Executive remuneration in Australia, with their continued popularity reflecting their relative cost effectiveness as a remuneration component. As with previous surveys, Mercer reports on motor vehicle costs in terms of actual motor vehicle costs and cash in lieu of cars. Information on car parking costs has also been provided. Please note that FBT costs are included in the Motor Vehicle Cost remuneration item.

Mercer considers vehicle availability to the SES employee when calculating vehicle cost. For example, for agencies using a car formula, a car will only be costed at the full market value if the SES employee has full private and unrestricted usage of the car. Where an SES employee is required to make the car available for use by other employees at certain times, or where there are other restrictions, such as the vehicle not being available for periods of annual leave or on weekends, the car has been costed at less than the full market value.

Table 2.6 presents the distribution of motor vehicle costs, including FBT, across all SES classifications for 2010. These costs include all leasing and running costs, but exclude other related costs such as parking. Note that the costs refer to the cost to an employee’s package, either calculated by applying Mercer’s Car Formula (refer to Appendix C) or using the agency’s identified vehicle budget.

Table 2.6 – Distribution of Motor Vehicle Costs* for all SES Classifications in 2010
Band Minimum Q1 Median Q3 Maximum Average SD % Rep
*Includes FBT
SES 1 $10,911 $24,000 $25,186 $28,000 $50,173 $25,803 $5,421 21%
SES 2 $10,239 $24,794 $26,500 $30,000 $63,697 $27,266 $6,890 31%
SES 3 $13,014 $25,000 $27,005 $32,000 $44,675 $27,295 $6,247 28%

Table 2.6 shows that:

  • close to one third of all SES 2 and SES 3 employees, and one fifth of SES 1 employees, have a motor vehicle as part of their remuneration package. This proportion has decreased considerably across all SES classifications since 2009
  • the minimum values of $10,239 (SES 2) to $13,014 (SES 3) may seem quite low; however, these values may reflect ‘part private use’ or ‘restricted private use’ for SES employees
  • the average and median motor vehicle costs increase in line with SES classification, and are slightly higher in 2010 than 2009.

Table 2.7 presents the distribution of cash payments provided in lieu of motor vehicles for all SES employees in 2010.

Table 2.7 – Cash in Lieu of Motor Vehicle for all SES Classifications in 2010
Band Minimum Q1 Median Q3 Maximum Average SD % Rep
SES 1 $649 $22,000 $24,553 $25,186 $30,358 $24,079 $2,278 59%
SES 2 $10,826 $23,728 $26,100 $26,500 $30,000 $25,369 $2,398 46%
SES 3 $18,118 $25,000 $27,902 $30,000 $30,650 $26,923 $2,756 43%

Table 2.7 shows that, as with motor vehicle costs (table 2.6), there is an increase in line with SES classification for the cash in lieu of vehicle payment at both the median and the average. The proportion of SES employees choosing to take cash in lieu of a motor vehicle has increased at each SES classification, most noticeably at SES 3, where the percentage representation has changed from 35 per cent in 2009 to 43 per cent in 2010.

Combining the information from table s 2.6 and 2.7, it is noted that a vehicle benefit (or cash in lieu) was received by 80 per cent of SES 1 employees, 77 per cent of SES 2 employees and 71 per cent of SES 3 employees. These participation levels are slightly lower than 2009.

Car parking is a benefit provided to a number of SES employees, and table 2.8 outlines the distribution of car parking costs (including FBT) across all SES classifications for 2010.

Table 2.8 – Car Parking Cost Distribution for all SES Classifications in 2010

Band Minimum Q1 Median Q3 Maximum Average SD % Rep
SES 1 $780 $1,750 $2,609 $3,500 $16,585 $3,126 $2,155 52%
SES 2 $780 $1,722 $2,983 $3,500 $12,023 $3,001 $1,950 48%
SES 3 $780 $1,642 $1,751 $3,142 $6,183 $2,327 $1,042 54%

Unlike motor vehicle values, car parking costs do not increase in line with SES classification, and in fact do the opposite for average values. The proportion of SES employees receiving a car parking benefit has remained constant at SES 1, decreased by 1 per cent at SES 2 and increased by 4 per cent at SES 3.

Performance bonuses

Table 2.9 shows performance bonus payments across all SES classifications in 2010. Note that the data included in table 2.9 includes those employees who were eligible but did not receive a bonus payment (i.e. data reported as $0); however, these responses only reflect 8 per cent to 16 per cent of the eligible employees across the classifications.

Table 2.9 – Performance Bonus Payment Distribution in 2010 for all SES Classifications
Band Minimum Q1 Median Q3 Maximum Average % Rep % > 0
SES 1 $0 $2,985 $7,972 $13,452 $38,187 $8,860 42% 92%
SES 2 $0 $3,658 $12,768 $18,956 $348,050 $14,892 37% 92%
SES 3 $0 $4,523 $7,000 $24,879 $35,810 $13,907 34% 84%

Table 2.9 shows that the median and average actual performance bonus payments in 2010 increased between the SES 1 and SES 2 classification and decreased between SES 2 and SES 3. All median bonus payments are lower in 2010 than was the case in 2009 while the average bonus payments are slightly lower for SES 1 and SES 3 than those paid in 2009. More detailed information regarding performance bonuses for each classification level is presented in Section 3.

Retention bonuses

Special payments are made to some SES employees as a means of retaining these employees for an identified period, such as for the duration of a project.

Table 2.10 shows the distribution of retention bonuses to eligible employees in 2010 across all SES classifications. Very few employees at each SES classification would receive retention bonus payments. Only 2 per cent of SES 1, 2 per cent of SES 2 and 4 per cent of SES 3 employees were eligible for retention bonuses in 2010. This is slightly higher than the proportions for 2009 (SES 1: 1 per cent, SES 2: 2 per cent and SES 3: 3 per cent). Of those eligible to receive a retention bonus, only 58 per cent of SES 1 and 69 per cent of SES 2 employees actually received payment, whilst insufficient data was available to calculate this figure for SES 3. Whilst there is a large range in the spread of payments from minimum to maximum, median payments are relatively low.

Table 2.10 – Retention Bonus Payment Distribution in 2010 for all SES Classifications
Band Minimum Q1 Median Q3 Maximum Average % Rep % > 0
SES 1 $0 $0 $1,000 $3,990 $30,000 $4,189 2% 58%
SES 2 $0 $0 $1,000 $1,000 $15,000 $1,732 2% 69%
SES 3 -- -- -- -- -- $38,200 4% --

Other bonuses

In 2010 insufficient data was available to statistically analyse the incidence of other bonus payments for SES employees. However, whilst other bonus payments are not a common feature of SES remuneration, for a few SES employees, the payments may be significant.

Other benefits

Other benefits (as described by agencies) for SES employees include items such as:

  • home PC 
  • living allowance – accommodation/meals
  • remote access (IT) allowance 
  • career transition training allowance 
  • allowance in lieu of mobile phone 
  • cash in lieu of spouse travel 
  • mobile phone 
  • professional membership fees 
  • airline lounge memberships 
  • professional development allowance 
  • job specific allowances 
  • overseas transfer costs 
  • study expenses 
  • temporary accommodation allowance
  • entertainment allowance 
  • skill supplement 
  • medical benefits 
  • additional leave

Where the item attracts FBT, the FBT payment has been included in the reported amount.

Table 2.11 shows the distribution of payments made for other benefits to each SES classification in 2010. The significant maximum payments have been verified. As can be seen from table 2.11, 4 per cent of SES 1, 7 per cent of SES 2 and 2 per cent of SES 3 employees received some other benefit (compared to 2009 where 6 per cent of SES 1 employees, 11 per cent of SES 2 and 14 per cent of SES 3 employees were recorded as receiving other benefits).

Table 2.11 – Other Benefits Payment Distribution in 2010 for all SES Classifications
Band Minimum Q1 Median Q3 Maximum Average SD % Rep
SES 1 $1,087 $1,405 $2,231 $4,330 $22,500 $3,756 $3,919 4%
SES 2 $1,000 $1,138 $1,830 $2,503 $45,000 $4,738 $9,401 7%
SES 3 -- -- -- -- -- -- -- 2%