Texas State Auditor's Office - Summary of Report 25-702

A Performance Audit

A Biennial Report on Executive Compensation at State Agencies

October 2024

Overview

Background

The State Auditor's Office conducted a comprehensive market analysis for 66 executive officer positions at 65 state agencies. The analysis identified a significant number of executive officer positions with salary ranges that may limit market competitiveness.

In addition to assigned salary ranges, most executive officers are also assigned not-to-exceed rates (NTE), which may limit the amount a position is paid. While most NTE rates were recently increased, this analysis determined that a significant number of executive officers still had NTE rates that were not competitive with the market.

Offering market-competitive salaries to executive officers is important to the State for several reasons, including attracting top talent, reducing turnover, and appropriately reflecting the value and contributions of state agency leaders.

MARKET ANALYSIS

Thirty-one executive officers were in salary ranges that may limit their ability to receive market competitive salaries. Fifty-five executive officers have NTE rates below the market average.

Jump to Chapter 1-A

PAY COMPRESSION

Pay compression exists among executive officers and their staff at several state agencies analyzed. Eighteen employees at 11 agencies had annual base salaries that were higher than their executive officers' salaries.

Jump to Chapter 1-B

TOP 40 HIGHEST-PAID MANAGEMENT EMPLOYEES

Of the 66 executive officers included in this study, only 11 executive officers were among the top 40 highest-paid management employees.

Jump to Chapter 1-C

EXECUTIVE OFFICER SALARY GROUPS AND NTE RATES RECOMMENDATIONS

Thirty-one executive officer positions are recommended for salary group reassignments to better align with the market. Also, NTE rates should be reviewed.

Jump to Chapter 2-A

SALARY RANGE ADJUSTMENTS

The salary ranges for the Schedule of Exempt Positions have not increased since fiscal year 2016. Adding a higher-level salary range and expanding existing ranges by 3.0 percent will help improve market competitiveness.

Jump to Chapter 2-B

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