Govt Aligns Crown-Owned Companies' Director Fees Closer to Market Rates to Attract Talent

Minister Paul Goldsmith Announces Staged Fee Increases to Support High-Quality Governance Amid Complex Market Conditions.

The government is implementing a phased plan to increase directors’ fees for 22 Crown-owned companies, aligning them more closely with private-sector market rates to better attract and retain high-quality board members, State Owned Enterprises Minister Paul Goldsmith announced.

"For more than 15 years, directors’ fees for these companies have remained nearly static, dropping as much as 56 per cent below current market rates," said Goldsmith. "This gap has created significant challenges in attracting and retaining directors with the commercial acumen essential for navigating Crown boards through increasingly complex operational environments."

Crown-owned enterprises, like their private counterparts, face intensified challenges due to rapid economic shifts, evolving regulatory requirements, and the pressures of aligning with public service mandates while remaining financially competitive. Minister Goldsmith emphasized that in order for Crown-owned companies to match the performance of private sector companies, it is critical to offer fair remuneration to directors, reflecting the heightened complexity and scope of their responsibilities.

The government’s plan involves a two-stage fee increase: directors’ fees will rise to around 85 percent of the market rate next year and then further increase to approximately 90 percent by 2026. These adjustments will be tailored according to each director’s role complexity and the scale of responsibility associated with their respective companies.

In the latest financial year, the 22 companies collectively generated approximately $6.3 billion in revenue, managing assets worth around $58 billion. This substantial economic footprint underlines the need for robust governance, which Minister Goldsmith believes can be achieved only by fairly compensating board members.

“Crown-owned companies are tasked with significant responsibilities to both their shareholders and the public,” Goldsmith added. "To ensure they are equipped to perform optimally, we must attract skilled directors who are willing to take on these unique challenges."

The new compensation structure is part of a broader government strategy to improve governance and performance in the Crown sector, ultimately aiming to drive better outcomes for New Zealanders.