SA council uproar as Remuneration Tribunal slashes CEO salaries

One Adelaide council wanted to pay their CEO more than the Premier, but the final decision has stunned local government.

The bid would have left some council bosses in line to earn more than Premier Peter Malinauskas. Picture: Morgan Hancock/AFL Photos/via Getty Images

A shake-up of renumeration limits for SA council bosses will force a widespread reduction of CEO pay packets, in a snub that’s angered councils pushing for higher pay limits up to $500,000.

The SA Remuneration Tribunal’s decision, which denied a request for an audacious pay increase for Adelaide City Council’s CEO, has been slammed by the Local Government Association and a leading local government lawyer who said it would have a detrimental impact.

Adelaide City Council had requested to increase the minimum pay limit for its CEO to $450,000 and the maximum to $500,000 – more than the annual salary of Premier Peter Malinauskas, who earns $460,000.

Instead, the tribunal decreased the minimum limit and increased the maximum limit from $431,600 to $458,557, prompting the council to complain in a submission the decision “creates real attraction and retention barriers”.

“It exacerbates the non-competitiveness of City of Adelaide CEO remuneration in comparison to that of CEOs of other Australian capital cities,” the submission said.

The council’s CEO Michael Sedgman presently earns $425,000 a year.

Adelaide City Council chief executive Michael Sedgman. Picture: Supplied

Burnside Council chief executive Julia Grant. Picture: City of Burnside

The maximum CEO salary limits were lowered for many other councils, such as Burnside, West Torrens, Campbelltown, Mitcham and Mount Barker, prompting a flood of petitions from councils who wanted to pay their CEOs more.

Burnside Council’s submission argued its CEO should be eligible for a higher salary because of “the complexities and unique challenges faced by the council, including highly engaged and affluent population, significant media scrutiny, and ongoing political challenges that make the CEO role more challenging than most”.

Burnside also suggested its CEO Julia Grant, appointed in December, had already signed a contract in keeping with the maximum salary limit of $351,520, which has now been reduced to $321,424.

Other councils including Unley, Walkerville and Gawler also raised concerns about being forced to lower their CEOs’ salaries after contracts were already signed.

Some councils will be allowed to pay their CEOs more than previously, such as Adelaide, Onkaparinga, Kangaroo Island, Charles Sturt and Port Adelaide Enfield.

Local government lawyer Michael Kelledy said the changes would lead to “a widespread reduction in CEO salary packages”.

“It is a big shake up where the impact is likely to be more detrimental than beneficial,” he said. “That’s in relation to CEOs who are paid above what has now been set as their new maximum, and councils which can pay lower amounts (when recruiting) in terms of people coming in to take a CEO position.”

A Local Government Association spokesman said councils, especially in regional areas, already struggled to recruit CEOs competitively.

“The tribunal’s new determination risks making it even harder to attract and retain suitable candidates,” he said.

SA Remuneration Tribunal president Matthew O’Callaghan said it had been “the most comprehensive review of local government chief executive remuneration in Australia”.

Burnside Council did not respond to a question asking why its affluent population warranted higher payment for its CEO.