SES pay trails private sector, beats nonprofits

The pay and benefits of members of the government's Senior Executive Service are less generous than those of executives at large private firms, a new Congressional Budget Office study concludes. But federal executives' compensation is equal to or higher than most nonprofit executives' pay and benefits.

The new CBO study, "Comparing the Pay and Benefits of Federal and Nonfederal Executives," found that executives in large private firms (annual gross revenues of more than $10 billion) have much higher pay and benefits than members of the federal Senior Executive Service. The average chief of personnel for a large private firm, for example, earns $315,000 a year in basic salary and total pay and benefits worth $1,048,000. Any member of the Senior Executive Service, in contrast, annually earns an average of $120,000 in basic salary and $169,000 in total pay and benefits.

Federal executives fare better against executives in medium-size private sector firms (annual gross revenues of less than $300 million) and in large nonprofit organizations (annual budgets of $50 million or more). A head of personnel in a medium-size private firm on average earns $89,000 a year in basic salary and $182,000 in total pay and benefits. The head of personnel for a nonprofit on average earns $65,000 in basic pay and $91,000 in total pay and benefits.

While comparing pay and benefits across various sectors is a useful tool in shaping federal compensation policy, CBO cautioned that the labor market may not affect the federal workforce in the same way it affects the private sector.

"Some people question the importance of relative levels of pay and benefits, since the federal government recruits for some top jobs from within its own ranks," CBO said, noting that "duties and responsibilities may vary between sectors despite similar job titles."

CBO also noted that within the private sector, pay levels vary widely. Top-paying large private firms pay their executives twice as much as low-paying large firms, CBO found.

The CBO study looked at basic pay, bonuses, retirement benefits, health insurance, sick leave and disability benefits, life insurance, holidays and vacations, and executive perquisites including company cars, cellular phones and memberships in athletic and other clubs.

In the area of perquisites, CBO found that 64 percent of private sector executives have access to official cars, while relatively few federal executives are afforded that luxury. Three percent of private sector executives also get free country club memberships from their companies-a perk few if any federal executives have.

A survey of federal executives earlier this year by the PricewaterhouseCoopers Endowment for the Business of Government found that 72 percent of them believed that offering better salaries would improve the government's ability to recruit and retain top talent. But just 5 percent said they expect the government to ever boost pay to levels comparable with the private sector.