Working paper

Reach for the stars: CEO salaries and the culture of celebrity in WA's public service

8 Oct 2006

Corporate CEO salary packages have risen spectacularly in recent decades – but these rises have enjoyed no significant connection with the standard market rationale: job difficulty/talent and performance. Although CEOs in the public sector are paid far less, their salaries are also rising fast and pay structures in the sector are rapidly becoming steeper. This applies especially to WA. Head of the WA Health Department, Dr Neil Fong, now commands a $600,000+ pay package making him the highest paid public servant in the country. Should we expect better links between pay and performance in the WA or any other public sector? If not, what does all of this money mean? This discussion suggests a number of the things: that CEOs are paid a great deal; that their ambition can be without limit; and that, taken together, their rewards and insatiable hunger may well, for worse rather than better, register an emerging celebrity culture within the public sector that damages both democracy and markets.

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