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Executive Compensation

Executive Compensation

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Published by mlisheron
A report by the Texas Auditor on the top salaries paid to state agency heads.
A report by the Texas Auditor on the top salaries paid to state agency heads.

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Published by: mlisheron on Aug 31, 2012
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John Keel, CPAState Auditor
A Report on
Executive Compensation at StateAgencies
August 2012
Report No. 12-708
 A Report on 
Executive Compensation at State Agencies 
SAO Report No. 12-708August 2012
This study was conducted in accordance with Article IX, Section 3.09, of the General Appropriations Act (82nd Legislature).For more information regarding this report, please contact Sandra Vice, Assistant State Auditor, or John Keel, State Auditor, at (512)936-9500.
Overall Conclusion 
The decisions of state agenciesexecutiveofficers directly affect the delivery of servicesto the citizens of Texas. Therefore, it is in theState’s best interest to ensure equitable payfor executive officer positions to help recruitand retain qualified executive officers capableof effectively and efficiently managing stateagencies. Executive officer salaries had a widerange—from $65,000 to $312,000—as of June30, 2012.A State Auditor’s Office study of executivecompensation identified significant disparitiesamong the salaries of some executive officerscompared with the salaries of other executiveofficers and/or compared with salaries of othermanagement positions at state agencies.Specifically:
Eleven (37 percent) executive officers wereamong the top 30 highest paid managementemployees at state agencies
pages 4 and 5 for more information).. The remaining19 (63 percent) positions were employees inother management positions (see Table 1 on
Ten of the 19 other management positions included deputy directors.
Seven of the 19 other management positions were at the Department ofTransportation (including two deputy directors).
Four executive officers and four other management positions earned highersalaries than the Health and Human Services Commission’s executivecommissioner (commissioner). The commissioner oversees 5 agencies with a
This analysis excluded investment and medical positions.
Exempt Positions, ExecutiveOfficers, and Other ManagementPositions
Exempt Positions.
An exempt positionis exempted from the State’s PositionClassification Plan (Plan). Article IX ofthe General Appropriations Actestablishes conditions for exemptpositions. The schedule of exemptpositions specifies salaries of certainemployees not covered by the Plan.
Executive Officers.
For the purpose ofthis report, executive officersrefersto state employees who serve as theadministrative heads for state agenciesand hold titles such as executivedirector, superintendent, andcommissioner. See Appendix 3 for a listof the specific positions covered by thisreport.
Other Management Positions.
For thepurpose of this report, othermanagement positions” refers to stateemployees who are not executiveofficers and hold titles such as deputydirector, division director, and chieffinancial officer.
A Report on Executive Compensation at State Agencies SAO Report No. 12-708 i
combined annual budget of approximately $31.8 billion and 57,001 authorizedfull-time equivalent employees.
The recommendations in this report are intended to bring about comparable payamong similar executive officer positions at state agencies. An analysis of the 30highest management salaries at state agencies identified the following:
The Department of Public Safety’s Colonel is not on the list of the top 30management salaries.
The Higher Education Coordinating Board’s commissioner, the Department ofCriminal Justice’s executive director, and the Texas Education Agency’scommissioner all tied at 27th on the list of the top 30 management salaries.(The Higher Education Coordinating Board’s commissioner is eligible to receivesalary supplements.)
The Health and Human Services Commission’s executive commissioner ranked9th on the list of the top 30 management salaries.
The Department of Transportation’s executive director ranked 2nd on the list ofthe top 30 management salaries.
The Employees Retirement System’s executive director ranked 1st and theTeacher Retirement System’s executive director ranked 4th on the list of the top30 management salaries. (The Employees Retirement System’s executivedirector is eligible to receive additional compensation.)For this analysis, the State Auditor’s Office placed agencies in one of threeexecutive officer compensation tiers, which are groups of agencies according torecommended salary groups, based on factors such as the size of the agency’sbudget, the number of authorized full-time equivalent employees, and thecomplexity of the agency’s mission (see Chapter 1-B for more information).
Summary of Objective, Scope, and Methodolog
The objective of this report was to conduct a study reviewing exempt positioncompensation to:
Compare exempt positions to market average compensation for similar executivepositions.
Compare exempt positionssalaries to classified positionssalaries.
Prepare an analysis of exempt position compensation that considers agency size,agency appropriations, authorized full-time equivalent employee levels, andclassified positions within the agency.
The commissioner during fiscal year 2012 retired effective August 31, 2012; a new commissioner was appointed effectiveSeptember 1, 2012.

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