Employment matters: How much pay is too much?

22:14, Jun 22 2014
Bridget Smith
PAY DAY: Would you take a pay cut to do a job you liked more, employment lawyer Bridget Smith asks?

Salary - how much is too much?

It has been the lead news story for much of the weekend, in both print and television; the story that Team NZ Chief Grant Dalton earns $2 million per annum.

Now I don't know whether that figure is accurate or not, but what is perhaps more interesting is the comparison, that Sir Russell Coutts, who ran the campaign for Oracle, was paid more than $10m.

That certainly provides some perspective. While $2m is a lot for the average New Zealander, it appears that it isn't necessarily a lot in the world of sailing.

In my line of work, dealing with large employers and senior employees, salary information is part and parcel of the job. I confess, while the law is hardly poorly paid for most, I have on occasion remarked I am in the wrong profession, when I have seen some client's salary packages (not just base salary but bonus packages, share packages, benefit packages etc).

The Statistics New Zealand Income Survey for the June 2013 quarter (the most recent available online) reported that the median weekly income from wages and salaries was $844 (an increase of $38 or 4.8 per cent).

Multiplying that by 52 (weeks in a year) is appears that the median salary in NZ is $43,888. Far less than $10m, let alone $2m.

The survey also reported that the percentage of people in the 50+ category earning wages and salary was up 1.3 per cent to 31.0 per cent.

What this tends to support is a growing trend towards employees working longer. Gone are the days when employees retired at 65, if not before. These days the very real question for many is - can I afford to retire?
Or put another way, can I afford to live off my superannuation and savings? This raises interesting issues for employers managing an aging workforce, particularly when the market is overrun with keen young graduates, across all disciplines, eager for work and willing undoubtedly to work for less than what an employer is paying an employee who has been with them for 30 years, receiving annual incremental pay increases.

Different industries pay at different levels. Some payments recognise training and tertiary qualifications (think doctors, lawyers, accountants, engineers), some recognise risk (think miners and deep sea divers) and some recognise uniqueness and perhaps even an inherent difficulty in performing the role for an extended period of time (think models and sportspeople).

So, ask yourself this Monday morning - are you happy with what you do? Are you happy with what you get paid? Was it the salary prospects that attracted you to the role, or something more? Would you, or could you, accept a drop in salary to do something else? Would you want to?

Share your thoughts below.

Bridget Smith is a partner at Swarbrick Beck Mackinnon and a member of the Auckland District Law Society.