1. Comparative Study on Remuneration Levels of Senior Public Officials in Six Caribbean Countries Ingrid Carlson Public Policy Management and Transparency Network Regional Policy Dialogue Inter-American Development Bank

2. 2 OBJECTIVES COMPARE AND ANALYZE SALARIES OF SENIOR PUBLIC OFFICIALS IN SIX CARIBBEAN COUNTRIES PRESENT SELECTED CHARACTERISTICS OF THE COUNTRIES’ NATIONAL COMPENSATION STRUCTURES PROMOTE DISCUSSION ON EFFECTIVE PAY POLICY

3. 3 COUNTRIES INCLUDED IN THE STUDY BAHAMAS BARBADOS GUYANA JAMAICA SURINAME TRINIDAD AND TOBAGO

4. 4 METHODOLOGY USED FOR THE ANALYSIS OF WAGE LEVELS ANALYSIS OF DATA PROVIDED BY REPRESENTATIVES OF THE SELECTED GOVERNMENTS COMPARISON OF RELATIVE SALARIES ACROSS COUNTRIES AND POSTS

5. 5 REQUESTED INFORMATION 1.DENOMINATION OF HIERARCHICAL LEVELS: Executive Branch: Prime Minister, Minister, and the three hierarchical levels below Minister Legislative Branch: Member of Upper House, Member of Lower House, top three administrative levels Judicial Branch: Top three hierarchical levels 2.DIRECT WAGE: Base wage (normally paid monthly) as well as any applicable supplements (normally paid less frequently, perhaps once or twice a year) 3.INDIRECT WAGE: Benefits (e.g. duty allowance, entertainment allowance, travel allowance, constituency allowance, retirement benefits, holidays and vacation time, health benefits, life insurance, etc.) TAXATION RULES FOR DIRECT WAGE TAXATION RULES FOR BENEFITS PENSION AND RETIREMENT RULES ADDITIONAL INFORMATION REQUESTED

6. 6 HIERARCHICAL LEVELS FOR WHICH DATA WAS PROVIDED, BY COUNTRY Note: N/A = not applicable; “…” = not available

7. Results: Executive Branch

8. 8 MONTHLY DIRECT WAGE (USD, PPP 2003) EXECUTIVE BRANCH Note: 2001 data for Bahamas; all others 2003.

9. 9 TOTAL MONTHLY WAGE (USD, PPP 2003) EXECUTIVE BRANCH BarbadosGuyanaJamaicaSurinameTrinidad and Tobago Monthly Indirect Wage (quantifiable benefits)

10. 10 POINTS TO CONSIDER WHEN COMPARING TOTAL SALARY LEVELS Which benefits are quantifiable varies by country. Some countries may have established rules that make possible the quantification of particular benefits (retirement benefits, health benefits, etc.), while other countries may not. Which benefits are included in this study, as in other studies, varies by country, according to the information provided by country representatives. For example, the value of constituency allowances—which are often sizable—were provided for Jamaica, but not for other countries. Non-quantifiable benefits (e.g. use of official residence, use of motor vehicle and/or chauffeur) may be significant in some cases, while in others relatively insignificant. TOTAL SALARY = DIRECT WAGE + (QUANTIFIABLE) INDIRECT WAGE

11. 11 RATIO OF MONTHLY DIRECT WAGE TO GDP PER CAPITA EXECUTIVE BRANCH Note: 2001 data for Bahamas; all others 2003.

12. Results: Legislative Branch

13. 13 MONTHLY DIRECT WAGE (USD, PPP 2003) LEGISLATIVE BRANCH Note: 2001 data for Bahamas; all others 2003.

14. 14 RATIO OF MONTHLY DIRECT WAGE TO GDP PER CAPITA LEGISLATIVE BRANCH Note: 2001 data for Bahamas; all others 2003.

15. 15 TOTAL MONTHLY WAGE (USD, PPP 2003) LEGISLATIVE BRANCH BarbadosGuyanaJamaicaSurinameTrinidad and Tobago

16. Results: Judicial Branch

17. 17 MONTHLY DIRECT WAGE (USD, PPP 2003) JUDICIAL BRANCH Note: Data for 2003.

18. 18 RATIO OF MONTHLY DIRECT WAGE TO GDP PER CAPITA JUDICIAL BRANCH Note: Data for 2003.

19. 19 TOTAL MONTHLY WAGE (USD, PPP 2003) JUDICIAL BRANCH BarbadosGuyanaJamaicaSurinameTrinidad and Tobago

20. Results: Selected Comparisons with Countries outside the Caribbean

21. 21 Ministers’ (or equivalent) Direct Monthly Salary (US$ PPP 2002/3) Note: Data for Bahamas from 2001.

22. 22 Upper and Lower House Members’ Direct Monthly Salary (US$ PPP 2002/3) Note: Data for Bahamas from 2001.

23. 23 Chief Justices’ (or equivalent) Direct Monthly Salary (US$ PPP 2002/3)

24. Results: Selected Public/Private Executive Pay Comparisons

25. 25 MINISTERS’ BASE PAY AS A PERCENTAGE OF PRIVATE SECTOR EXECUTIVE BASE PAY TRINIDAD AND TOBAGO Source for private sector data: PriceWaterhouseCoopers “Executive and Managerial Compensation Survey 2002.”

26. 26 MINISTERS’ BASE PAY AS A PERCENTAGE OF PRIVATE SECTOR EXECUTIVE BASE PAY JAMAICA Source for private sector data: The Jamaica Employers’ Federation. “Salary and Benefits Survey for Executive and Managerial Staff 2002.”

27. 27 POINTS TO CONSIDER WHEN COMPARING PUBLIC/PRIVATE WAGE LEVELS Due to complexities of quantifying and making valid comparison of benefits/allowances, the preceding two graphs show comparisons of basic salary. –However, benefits often make up a significant portion of total compensation for both public and private executives, but especially for private sector executives (including bonuses, incentive rewards, stock grants, stock options) Also, data on private sector executive compensation used here come from two distinct sources. –So, different methods of research and calculation affect the results and thus make cross-country comparison problematic (i.e. the characteristics of the sample of private firms used in each study are different) –The survey completed in Trinidad and Tobago includes data from 48 small, medium and large firms; the survey completed in Jamaica includes data for 156 firms

28. General Observations and Conclusions

29. 29 GENERAL CHARACTERISTICS OF THE HIGH- LEVEL PUBLIC SECTOR COMPENSATION STRUCTURES IN THE SIX COUNTRIES Clear wage hierarchy in almost all cases Highest salaries found in the Judicial Branch, consistent with international patterns Similar compensation structures across countries (base wage plus a relatively uniform set of benefits/allowances) –Though in many cases the values of significant benefits/allowances are either non-quantifiable or were not quantified by respondents Apparent lack of performance-related pay mechanisms within compensation structures

30. 30 ISSUES FOR DISCUSSION 1.Availability and systemization of data on salaries and benefits/allowances varies by country How to increase the availability of data needed for establishing effective pay policy? Are public sector executives’ compensation packages disclosed to the public? 2.Private/public pay differentials may be quite high for posts at the top of the hierarchy How to attract and retain talented staff? How to establish the public sector as an employer of choice? 3.Countries around the world have moved or are moving toward introducing performance-related pay systems How to implement and improve performance measurement systems, so that they are (and are perceived to be) transparent and fair? How to establish systems that recognize and reward high achievers, linking pay to performance and training? 4.What initiatives are underway in these areas in Bahamas, Barbados, Guyana, Jamaica, Suriname and Trinidad and Tobago that may provide useful lessons? For example, Jamaica’s Public Sector Modernization Vision and Strategy, 2002-2012

31. COMPARATIVE STUDY ON REMUNERACION LEVELS OF SENIOR PUBLIC OFFICIALS IN SIX CARIBBEAN COUNTRIES Ingrid Carlson Public Policy Management and Transparency Network Regional Policy Dialogue Inter-American Development Bank