A Classification Report
A Report on Executive Compensation at State Agencies
August 2022
Summary Analysis
The State Auditor’s Office conducted a study of the salaries and assigned salary groups for 66 executive officer positions at selected state agencies. These positions were exempt from the State’s Position Classification Plan.
The majority of the executive officer positions were assigned to salary groups with competitive salary ranges. However, nine executive officer positions at the following agencies were assigned to salary groups with pay ranges that may limit the ability to offer market-competitive salaries:
- Commission on Environmental Quality.
- Commission on State Emergency Communications.
- Department of Information Resources.
- Department of Public Safety.
- Facilities Commission.
- Library and Archives Commission.
- Military Department.
- Office of Injured Employee Counsel.
- Water Development Board.
To determine whether executive compensation is sufficient to attract highly qualified executive officers for state agencies, it is important to study the market rates for comparable professional positions. If the State’s salary ranges fall too far below market rates, the State may have difficulty in recruiting and retaining executive officers.
For this study, a market comparison was conducted for 66 executive officer positions using a balance of public and private sector data appropriate to the nature and complexity of each executive officer position.
The two highest-paid executive officers at state agencies, based on annual base salaries as of June 30, 2022, were the executive officers at the Teacher Retirement System and the Department of Transportation. When additional pay was included, the executive officer at the Employees Retirement System was the highest paid. The Teacher Retirement System’s and Employees Retirement System’s boards of trustees set the salaries for these positions.
The State Auditor’s Office conducted a market analysis on 66 executive officer positions using public and private sector data appropriate to the nature and complexity of selected executive officer positions that were exempt from the State’s Position Classification Plan during the 2022-2023 biennium.
Pay compression may occur when the pay of a subordinate employee approaches, matches, or exceeds the pay of a direct supervisor, including an agency’s executive officer. In these cases, differences in pay may be disproportionate to differences in responsibilities, which could create internal inequity.
To determine whether pay compression exists, the State Auditor’s Office reviewed the annual base salaries as of June 30, 2022, of executive officers and full-time classified, unclassified, and other exempt employees at state agencies (excluding higher education institutions; legislative agencies; elected officials; the Secretary of State; the Office of the State Prosecuting Attorney; the courts; and self-directed, semi-independent agencies).
Table 7 shows the changes in base salaries over 5 years for the 30 highest-paid executive officer positions at state agencies. Salary increases for these positions ranged from 1.0 percent to 41.9 percent from fiscal year 2018 to fiscal year 2022.
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