The new State Services Commission boss has promised a conservative approach to public sector pay, as we creep closer to having our first million-dollar chief executive.

State Services Commission chief executive Peter Hughes - himself one of the highest-paid public sector heads - says salaries must be high enough to attract qualified people, while still able to be defended to taxpayers.

The commission's Senior Pay Report for 2015/16 has revealed Guardians of New Zealand Superannuation boss Adrian Orr is the highest-paid state sector chief executive, making $950,000 to $959,999.

Orr, who oversees the $30 billion Super Fund, received a $120,000 pay bump compared to the previous year, although the increase includes "a component related to a job resizing".

READ MORE: Highest paid public servants in 2014/15

ACC chief executive Scott Pickering takes second place, with a salary between $810,000 and $819,999, while Auckland University vice-chancellor Stuart McCutcheon was third-highest with $710,000 to $719,999.

MAARTEN HOLL/FAIRFAX NZ Super Fund chief executive Adrian Orr is our highest paid public servant.

Hughes' predecessor at the State Services Commission, Iain Rennie, received between $760,000 and $769,999, although that included an entitlement payout of $93,000.

In total, 13 public sector bosses made over $600,000 in 2015/16, compared with 11 for the previous financial year.

State sector bosses made 5.5 times the average salary of their employees, with the ratio remaining "relatively stable" in recent years.

"These figures are modest compared to the pay ratios of publicly listed New Zealand firms," the report says.

The pay of chief executives at government departments and ministries is set by the State Services Commissioner, except for the State Services Commission, Crown Law and the GCSB, which is handled by the Remuneration Authority.

Crown entity chief executives like Orr have their salary set by their board, following consultation with the State Services Commissioner.

District health boards and university boards or councils must get the State Services Commissioner’s agreement to the terms and conditions of employment, including their pay and any increases.

'CAREFUL BALANCE' NEEDED ON PAY

In a statement accompanying the report, Hughes said he was responsible for finding the right balance when setting the salaries of chief executives, who had "big and challenging roles that are critical to the lives and wellbeing of all New Zealanders".

"How we pay the leaders of our public service requires a careful balance to make sure we are being fair to the chief executives themselves, recognising the jobs they do, while we are also being fair to the taxpayers who pay the bill."

The salaries had to be "defensible", but high enough to ensure highly skilled and qualified people could be hired, Hughes said.

"As State Services Commissioner, I will be taking a conservative approach to what we pay chief executives, particularly at the top end."