A Report on Executive Compensation at State Agencies
Report Number 14-705
The decisions of state agencies' executive officers directly affect the delivery of services to the citizens of Texas. Therefore, it is in the State's best interest to ensure equitable pay for executive officer positions to help recruit and retain qualified executive officers capable of effectively and efficiently managing state agencies. Executive officer annual base salaries had a wide range—from $70,000 to $335,000—as of June 30, 2014.
The State Auditor's Office conducted a study of executive compensation and identified significant disparities among the annual base salaries of some executive officers compared with the annual base salaries of other executive officers and/or compared with the annual base salaries of other management positions at an agency. Specifically:
- Twenty-seven executive officers were among the top 100 highest paid management employees at state agencies. The remaining 73 positions were employees in other management positions (see Table 1 on page 4 for more information).
- Of those 73 other management positions, 21 were at the Department of Transportation.
- Four executive officers and 10 other management positions earned higher annual base salaries than the Health and Human Services Commission's executive commissioner and the Department of Criminal Justice's executive director. The executive commissioner of the Health and Human Services Commission oversees 5 agencies with a combined budget for fiscal year 2014 of approximately $36.0 billion and 57,866.5 authorized full-time equivalent (FTE) employees. The Department of Criminal Justice has a budget for fiscal year 2014 of approximately $3.2 billion and 40,295.4 authorized FTE employees.
The recommendations in this report are intended to bring about comparable pay among similar executive officer positions at state agencies. An analysis of the 100 highest management annual base salaries at state agencies identified the following:
- The annual base salary for the Department of Public Safety's director ranks sixty-sixth among the 100 highest management annual base salaries.
- The Employees Retirement System's executive director ranks first and the Teacher Retirement System's executive director ranks second among executive officers on the list of the 100 highest management annual base salaries at state agencies.
For this analysis, the State Auditor's Office placed agencies in one of three executive officer compensation tiers, which are groups of agencies according to recommended salary groups, based on factors such as the size of the agency's budget, the number of authorized FTE employees, and the complexity of the agency's mission. For example, the agencies placed in Tier I include health and human services, education, and public safety agencies (see Chapter 1-B for more information).