The typical compensation package for career senior executives includes salary and awards. Additionally, members enjoy a benefits package and are eligible for other forms of recognition.
Salary
The National Defense Authorization Act for Fiscal Year 2004 (Public Law 108-136, November 24, 2003) established a performance-based pay system for members of the Senior Executive Service. The SES pay range has a minimum rate of basic pay equal to 120 percent of the rate for GS-15, step 1, and the maximum rate of basic pay is equal to the rate for Level III of the Executive Schedule. However, for any agency certified under 5 U.S.C. 5307(d) as having a performance appraisal system which, as designed and applied, makes meaningful distinctions based on relative performance, the maximum rate of basic pay will be the rate for Level II of the Executive Schedule.
On December 27, 2012, the President signed an Executive order containing the 2013 pay schedules for the SES.
The minimum rate of basic pay for SES members will remain at $119,554 in 2013. The applicable maximum rate of basic pay for the SES will continue to be $179,700 (EX-II) for SES members covered by a certified SES performance appraisal system and $165,300 (EX-III) for SES members covered by an SES performance appraisal system that has not been certified.
Agencies with certified performance appraisal systems for SES members and SL/ST positions must also apply a higher aggregate limitation on pay--up to the Vice President's salary ($230,700 in 2013, the same level as in 2012). (See 5 U.S.C. 5307 and 5 CFR part 530, subpart B.)
For a chart of the Rates of Basic Pay for Members of the Senior Executive Service visit the Salaries & Wages webpage.
Critical position pay up to Level I of the Executive Schedule may be authorized only in rare exceptional cases under 5 U.S.C. 5377. Critical position pay may be granted only for positions that require expertise of an extremely high level in a scientific, technical, professional, or administrative field, and are critical to the agency's accomplishment of the agency's mission, and only to the extent necessary to recruit or retain an individual exceptionally well qualified for the position.
Awards
Performance awards (bonuses) may be given only to career executives and are for performance during the previous appraisal period. The agency head approves awards following recommendations by the agency Performance Review Board. The amount of an award must be between 5 percent and 20 percent of the executive's rate of basic pay as of the end of the performance appraisal period. Generally, total award payments in an agency are limited to 10% of the aggregate amount of basic pay paid to career appointees as of the end of the previous fiscal year; an alternative formula is provided for small agencies. Superior accomplishment incentive awards for suggestion, invention, or special act or service may be paid, but not in lieu of a performance award (bonus).
View the latest guidance on awards.
Senior executives can also be nominated for other forms of recognition.
Retention of SES benefits: Career SES members who, without a break in service, accept a Presidential appointment to an Executive Schedule position (or a position whose pay is set by reference to an Executive Schedule rate) may elect to retain SES benefits (e.g., pay, leave, performance awards and Presidential Rank Award eligibility).
Impact of Pay Freeze Legislation on Senior Executive Service Employees
- How is the pay freeze defined by Public Law 111-322, December 22, 2010?
- Section 147 of the Continuing Appropriations Act, 2011 (Pub. L. 111-242, September 30, 2010), as amended by section 1(a) of the Continuing Appropriations and Surface Transportation Extensions Act, 2011 (Pub. L. 111-322, December 22, 2010), hereafter "the Act," prohibits statutory pay adjustments for most federal civilian employees as well as basic pay increases for employees in senior executive (SES), senior level (SL) and scientific or professional (ST) and equivalent positions, except as permitted in that section (see Attachment 1 of Compensation Policy Memorandum 2010-24). The pay freeze will be in effect during the period beginning on January 1, 2011, and ending on December 31, 2012."
- Agency Performance Review Boards (PRB) meet to make recommendations on SES performance ratings and awards for each performance appraisal cycle. Should PRBs still make award recommendations to the agency head during the pay freeze?
- Yes. The pay freeze legislation does not affect performance appraisal requirements or restrict performance awards. Performance Review Boards are required by 5 U.S.C. 4314(c) and 5384(c), respectively, to make recommendations on ratings and awards for members of the Senior Executive Service. Deciding officials must consider those recommendations before taking final action. This PRB responsibility is an important and integral part of the agency's performance management process for senior executives.
- How does the pay freeze affect SES pay increases normally granted based upon a recently completed performance appraisal cycle?
- Such pay increases are precluded by the pay freeze. In general, 5 U.S.C. 5382 provides that a senior executive shall be paid at a rate within the SES range based upon individual performance and/or contribution to the agency's performance. In addition, 5 U.S.C. 5383 provides that each appointing authority shall determine which of the rates within a range established under section 5382 shall be paid to each senior executive under such appointing authority. However, section 147(c) of the Act applies "notwithstanding any other provision of law" to restrict a senior executive from receiving an increase in his or her rate of basic pay during the designated two-year period. The Act also includes the criteria for an exception in that section - i.e., increases based on "a change of position that results in a substantial increase in responsibility, or a promotion." An agency may have its PRBs make recommendations on exceptions consistent with the pay freeze law, but pay adjustments that are based upon the results of a recently completed performance appraisal cycle do not meet the criteria for this exception.
- How does the pay freeze affect SES bonuses that are approved based upon a recently completed performance appraisal cycle?
- The pay freeze does not apply to performance awards paid under 5 U.S.C. 5384 and 5 CFR 534.405.
- How does the pay freeze affect the possible issuance of increases in January to maintain an executive's relative position within the rate range?
- The pay freeze precludes such increases because they do not meet the criteria for the exception in section 147(c) of the Act. Additionally, the underlying pay rates that determine the SES rate range will remain unchanged - i.e., 120 percent of the minimum rate of basic pay payable for GS-15 of the General Schedule and the rates of basic pay for level III and level II of the Executive Schedule. Since the SES pay rate range will not change, agencies will not need to adjust a senior executive's rate of basic pay to maintain his or her relative position within the rate range.
- How does the pay freeze affect a pay increase required to ensure that a senior executive's pay remains within the SES rate range?
- Since the rate range is not increasing, an SES member's rate will not fall below the range minimum as a result a range adjustment. Thus, such an action presumably would be required only if a senior executive has suffered an unjustified or unwarranted personnel action resulting in a past failure to adjust pay to an appropriate level (e.g., the minimum rate of the SES rate range, prior to the pay freeze). Under 5 CFR part 550, subpart H, an agency is required to correct such actions and, if the action has resulted in the withdrawal, reduction or denial of all or part of the pay, allowances and differentials otherwise due the employee, to provide back pay to the senior executive under section 5596 of title 5, United States Code. This should result in establishment of a new rate of basic pay effective prior to the pay freeze that becomes the rate subject to the pay freeze.
- What effect will the pay freeze have on an agency's ability to receive OPM certification of its SES performance appraisal system?
- To meet the certification criteria, agencies are expected to make distinctions in rates of pay, pay increases, and/or performance awards. The Act only freezes pay adjustments, and does not affect the agency's ability to grant performance awards to career executives. Therefore, agencies can make the pay distinctions required for performance appraisal system certification in their bonus decisions. OPM is aware the Act imposes certain limitations on agencies in making pay distinctions and would consider these limitations in applying the certification criteria.
- Since agencies cannot grant pay adjustments that impact the pay distinctions required by the criteria for SES performance appraisal system certification, why should an agency bother to seek certification until the freeze ends?
- Agencies will need to maintain their SES performance appraisal system certification in order to use the full SES rate range up to Executive Schedule Level II to hire new executives. Moreover, the law provides for certification of agency appraisal systems. While certification allows agencies to pay higher rates and use a higher aggregate limit on pay, this is not the sole purpose of certification. The certification process ensures agencies review their appraisal systems and the effectiveness of their executive performance plans. The criteria for certification require agency performance appraisal systems to provide for, and performance plans to execute, the following: alignment of executive performance requirements to agency mission; predominant focus on measurable results-based requirements; balanced measures, including customer and employee perspective; and accountability for effective performance management of subordinates. While one of the criteria that reflect the application of these systems is the agency's pay distinctions, OPM would consider the impact of the freeze when considering agency certification requests.
- How does the pay freeze impact an SES member who is voluntarily or involuntarily reassigned to another SES position?
- An agency may grant a basic pay increase to an SES member upon voluntary or involuntary reassignment only if the increase is based on a change of position resulting in a substantial increase in responsibility, consistent with applicable statutory and regulatory requirements. For example, such a pay increase would be subject to the 12-month restriction at 5 CFR 534.404(c). Therefore, the pay increase could not be granted within 12 months of the senior executive's most recent pay increase unless an exception is approved under 5 CFR 534.404(c)(4)(ii), in addition to the exception under section 147(c) of the Act. Once granted, the pay adjustment would initiate a new 12-month restriction. If more than 12 months have passed since the senior executive's last basic pay adjustment, the agency may determine whether a pay increase is justified under section 147(c) under such procedures as the agency head may establish. The procedures should include, as appropriate, review by an official at a higher level than the agency official otherwise authorized to take the pay action and must ensure verification and objective comparison of the positions' relative responsibilities.
- How does the pay freeze impact SES members who transfer to another SES position?
- An agency may grant a basic pay increase to an SES member who transfers from another agency only if the increase is based on a change of position resulting in a substantial increase in responsibility, consistent with applicable statutory and regulatory requirements. Once granted, the pay adjustment would initiate a 12-month restriction. The agency determines whether a pay increase is justified under section 147(c) under such procedures as the agency head may establish. The procedures should include, as appropriate, review by an official at a higher level than the agency official otherwise authorized to set pay and must ensure verification and objective comparison of the positions' relative responsibilities.
- Does the pay freeze preclude a pay increase for an SES member detailed to another position with a substantially higher level of responsibility?
- Yes. For purposes of pay and benefits, a senior executive on detail continues to encumber the position from which he or she is detailed. Agencies may not grant a pay increase to an SES member detailed to another position because no change of position has occurred for purposes of pay and benefits. The same is true of an SES member assigned to "act" in a position of substantially greater responsibility rather than reassigned to that position.
- Does the pay freeze apply to Presidential Rank Awards for SES members under 5 U.S.C. 4507?
- No, the pay freeze does not apply to these awards.
- Does the pay freeze apply to base salary decreases for SES members?
- No. An agency may involuntarily reduce a career senior executive's rate of basic pay under 5 CFR 534.404(j) for performance or disciplinary reasons subject to restrictions on reducing the pay of senior executives in 5 CFR 534.404(b) and 534.404(c) or on setting pay below the minimum rate of the SES rate range in 5 CFR 534.403(a). However, an agency should take the duration of the pay freeze into account when assessing the appropriate reduction for a senior executive. Under 5 CFR 534.404(c), a senior executive whose pay is reduced but who resolves any problems and demonstrates stronger performance has the opportunity for a pay increase after 12 months, but the pay freeze can impose a significantly longer waiting period. For example, a pay reduction in January 2011 is fixed for 24 months until January 2013; a pay reduction in April 2011 is fixed for 21 months, and so on-absent a change of position that meets the criteria in section 147(c) of the Act for an exception to the pay freeze.
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