The Prime Minister has put the board of the New Zealand Super Fund on notice, after it approved a significant, 23 percent pay increase for its chief executive, Adrian Orr.
Mr Orr's salary rose from $830,925.00 in 2014/2015 to $1,025,121.00 this past financial year.
Of that, $334,799 was a performance bonus payment, and did not include a $30,754 Kiwisaver payment.
As Finance Minister, Bill English opposed the increase on the basis it was too large for a public sector agency.
Now he has said there would be further discussions with the chairperson of the board.
Mr English said the board's decision to increase Mr Orr's pay packet by so much would be taken into account when the board positions were reviewed.
"The government has a view, the board has taken a different view.
"I think any board who takes a different view when it's 100 percent subsidiary takes risks about tenure and that will be discussed when the appointments come up."
He said this was not an issue unique to the Super Fund, saying there were other boards who had taken a "pretty independent" view about remuneration.
"There has been pressure on all these salaries, including the Reserve Bank board, around the Reserve Bank governor.
"I think it would better to find a more stable process for these significant appointments, there are only four them in the country: the Reserve Bank, the Super Fund, the ACC, and Housing New Zealand, there are all sort of $20 billion plus organisations, so much larger than almost all of our private sector organisations.
"But they're still public organisations."
He said he would like to find a way to avoid what he called the current "unsatisfactory haggle".
Mr English acknowledged the performance of the Fund and the professionalism and competence of the board.
"But they're public entities and the government has a view about remuneration increases."
A spokesperson for the publicly owned entity, Catherine Savage, told Checkpoint with John Campbell Mr Orr's increase was not high compared to his international counterparts.
She acknowledged that Mr English had put the board of Super Fund on notice and said that was his prerogative.
Ms Savage also defended the board's decision in a statement.
"The CEO's remuneration is fair, competitive and appropriate given the nature and complexity of the role.
"The role of CEO of the Guardians is unique in New Zealand, has grown in complexity and scope over time, and requires original strategic thinking and leadership.
"The CEO's remuneration reflects the Guardians' highly specialised focus and the potential difficulty in replacing the CEO's skill set."
She said Mr Orr had been a strong performer, as had the Fund over a sustained period.
"In determining an appropriate salary for the CEO the board relied on external market data.
"Independent remuneration specialists advised that the CEO's role size had increased since it was last reviewed, in line with the growth in the size of the Fund from $23 billion in 2013 to circa $30 billion in 2016.
"The CEO's remuneration is not high compared to international peers."
Also in a statement, the State Service Commissioner Peter Hughes said the board had made the decision about the CEOs remuneration, as it was entitled to do.
But he said he in this case he did not support the Board's decision to increase potential remuneration by 35.6 percent.
"The chief executive is performing strongly and the New Zealand Superannuation Fund is achieving very good returns.
"However, an increase of this size is significantly out of step with the rest of the state sector and is difficult to justify in a public organisation."
Mr Hughes was calling for greater transparency around decisions Crown Entity Boards were making about remuneration increases, and said in the future the Commission would publicly disclose whether a board had followed its advice, or had chosen to "act independently".