Eleven agencies win approval to raise executive pay

The Office of Personnel Management and the Office of Management and Budget have granted 11 federal agencies the authority to raise base pay caps for executive-level personnel to $158,100 per year, and to aggregate pay to as much as $203,000, after bonuses are included.

The raises are allowed because OPM and OMB certified, at least provisionally, that the agencies had crafted appraisal systems for Senior Executive Service members, effectively linking pay to job performance.

Congress included language in the 2004 Defense Authorization Act aimed at relieving pay compression among senior executives. More than 70 percent of executives are now at or near the old base pay cap of $145,600.

But the legislation stipulated that agencies could implement the new, higher pay cap only if they demonstrated to OPM and OMB that executives would be evaluated, and pay raises granted, on the basis of performance.

One agency, the Pension Benefit Guaranty Corporation, received full certification for its performance evaluation system, while 10 others won provisional certification: Health and Human Services; Interior and Transportation departments; Environmental Protection Agency; Federal Energy Regulatory Commission; Federal Trade Commission; Office of National Drug Control Policy; Merit Systems Protection Board; Railroad Retirement Board and Social Security Administration.

Full certification requires that agencies' performance appraisal systems for executives meet nine criteria in the areas of "strategic alignment, consultation, results, balance, assessment and guidance, oversight, accountability, performance differentiation, and pay differentiation," according to the OPM announcement.

Provisional certification is given to agencies whose performance appraisal systems have met five of the nine criteria: "strategic alignment, consultation, results, balance and accountability." Full certification cannot be granted to any agency unless it can demonstrate two years of results under the pay differentiation and performance differentiation criteria, the announcement stated.

OPM and OMB also are considering applications for certifications from 15 additional agencies, which are currently in "various levels of review," the announcement said.