The National Defense Authorization Act for Fiscal Year 2004 (Public Law 108-136, November 24, 2003) established a new performance-based pay system for members of the Senior Executive The new 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.
The President's Executive order adjusts the minimum rate of basic pay for the SES rate range to be consistent with the increase in the minimum rate of basic pay for senior-level positions under 5 U.S.C. 5376 ($109,808 in 2006). The applicable maximum rate of basic pay for the SES is $165,200 (EX-II) for SES members covered by a certified SES performance appraisal system and $152,000 (EX-III) for SES members covered by an SES performance appraisal system that has not been certified. An SES member at the minimum rate of the SES rate range must receive a pay increase of 2.1 percent in January 2006, since an SES member may not receive less than the minimum rate of the SES rate range. An increase in pay necessary to ensure that an SES member's rate of basic pay remains within the SES rate range is not considered a pay adjustment for the purpose of applying the 12-month rule.