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2014: Downward trend in new chiefs' pay eases off

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The downward trend in salaries for new chief executives has slowed, with the smallest average decrease since 2010, exclusive LGC research shows.

The latest LGC Salary Tracker has found that, for 21 appointments in England, Scotland and Wales since July 2013 in which direct comparisons can be made, the average fall in a new chief’s pay compared with that of their predecessor was 6.1%.

This marks a significant slowdown since early 2013, when the fall was 10%, and has prompted suggestions that chief executive pay has plateaued at a level below which it would be difficult to recruit good candidates.

The greatest drop came in early 2011, at 19%.

Between June 2013 and June 2014, six new chiefs took office with double digit percentage reductions against their predecessors’ salaries. Six started on a salary unchanged from that of their predecessors, with the remainder starting on single-digit reductions.

Cumbria CC’s Diane Wood, who was appointed in September, saw the largest percentage drop with her £140,000 salary a 17.6% reduction on that of her predecessor. She had been acting chief executive since Jill Stannard’s departure in May 2013.

Seven councils froze the post’s salary including Weymouth & Portland BC and West Dorset DC, where Matt Prosser followed a shared chief executive into the same role.

Three councils decided to become ‘chiefless’: West Sussex CC, Gloucester City Council and Harborough DC.

The salary tracker started in 2010 when politicians began to criticise senior public sector salaries, especially those in excess of the prime minister’s pay, now £142,500.

Solace director Graeme McDonald said: “My impression would be that things are beginning to stabilise, with councils offering new chiefs roughly the same money.

“There comes a point where you need to recruit good people and if you want to encourage the best directors to become chief executives you have to pay them appropriately while also being prudent about cost.”

He said large falls in salary were most likely linked to chiefs appointed before the recession.

Jonathan Flowers, director of the recruitment firm Veredus, said chief executives appointed on higher pay scales before the recession found it “difficult to move job, even to a bigger job, without taking a pay cut”.

“I think that contributes to people perhaps staying longer in a job than they might otherwise have done,” he said.

However, he added, the relatively small number of appointments made it difficult to establish trends.

LGC’s salary tracker also reveals that the proportion of internal appointees has stabilised at 52%, in line with levels for much of the period from 2010 to 2012, following a spike at 81% in the first half of 2013.

Those becoming a chief for the first time accounted for 71% of appointments, down from 78% in the last survey.

No particular professional background dominated. Five were from finance, with regeneration, education, law, highways and environmental services and various corporate roles also represented.

Cornwall’s appointment of Andrew Kerr is thought to be the first of a chief executive who lost their post when their previous council became ‘chiefless’, in his case Wiltshire Council in 2011.

Cardiff City Council’s Paul Orders returned to the city in the top job, having previously been a corporate director there, after two years as chief executive of Dunedin City Council in New Zealand.


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Readers' comments (1)

  • Even before the decline the average remuneration for CE's was well below the comparable senior positions in the private sector. Arguably local government has a more complex management remit, especially where executive members are particularly active in management.

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