CEO Excessive Salaries

John Masauskas, from Herald Sub reported on 22 May 2015 that LGV is putting Councils’ CEOs on notice about their excessive salaries:

“THE State Government has put local councils on notice over excessive salaries for their chief executives, most of whom earn more than the British prime minister. 

As of March 31 last year, the median salary for Victorian council bosses was $295,000.

UK Prime Minister David Cameron earns $283,000. Prime Minister Tony Abbott earns about $507,000.

Top-of-the-range wages for council chiefs were $460,000 at Melbourne City Council, up to $420,000 at Darebin, up to $380,000 at Boroondara, and up to $370,000 at Moreland and Whitehorse.

Council CEO salaries rose by up to 4.9 per cent over the year to March 2014. Chiefs of large metropolitan councils got an average 3.8 per cent pay rise, and chiefs of small rural ones a 4.6 per cent pay hike.

Inflation over that period was 2.9 per cent.

The State Government is preparing to cap council rate increases at the level of the CPI from July next year, putting pressure on councils to rein in costs, including wages. Local Government Minister Natalie Hutchins, who has previously called some CEOs’ pay “over the top”, said councils were responsible for appointing CEOs and fixing pay.

“They should always take into account community expectations and needs,” Ms Hutchins said.

“Excessive salaries are simply not justified,” she said.

But Municipal Association of Victoria president Bill McArthur said cutting CEO pay would have little impact on council costs, and the salaries were justified. “They are running a multi-million dollar business that is delivering in excess of 100 services and also overseeing a major infrastructure budget. Unless you’ve got the right people running the business then you won’t get the results you need,” he said.

Mr McArthur said the salaries should be compared with those earned by heads of government departments. He said they were much lower than those enjoyed by CEOs of private companies.

The MAV is also concerned about the effect of the rates cap on councils’ service delivery.”

It is time to clean up Local Government.

Earlier Jack Davies was asked to comment in the Maribyrnong Leader (20 May 2015) about Maribyrnong’s council wages showing 28 officers on a pay scale of between $130,000 and $309,999, of which nine are paid up to $149,999 and six up to $159,999.

Jack said “it was “ridiculous” that senior officers were being paid six-figure salaries. One-third of ratepayers’ funds go into administration costs. Salaries should be capped so they can stop the increases. They also get a massive superannuation payout, free cars and traveling expenses.” He added that “the performance of senior staff should be evaluated by an independent body instead of by their peers”.

Ratepayers welcome Local Government Minister Natalie Hutchins’s warning to councils to “rein in spending on executive salaries rather than blame the cap for financial problems.” She further said “blaming any cuts to essential services on capping is unfair and dishonest. Councils need to put a stop to over-the-top executive pay rises and needless waste.” (Maribyrnong Leader, 20 May 2015).