Super City’s CEO’s salary increase and the living wage

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Merry Christmas everyone.

Someone who will be having a particularly merry Christmas is Auckland Council’s chief executive Stephen Town. He was recently awarded a salary increase. While all Council employees should be looked after and treated properly this particular increase was rather large. His annual salary went from $630,000 per annum to $690,000 per annum, a hefty 10% increase.

It should be noted that the salary is fixed for two years. A front loaded 5% increase per year for two years is still pretty good.

To provide some context the previous chief executive, Doug McKay was paid an eye watering $675,000 in 2010 with a bonus of $67,500 potentially payable on top. Somehow the bonus crept up to $75,000 and in 2012 his pay including bonuses fell just short of $840,000.

Three quarters of Aucklanders opposed the size of his pay and thought that the chief executive should be paid closer to $500,000 than $800,000. Because of this Stephen Town’s salary was downsized considerably. But this evidence of upward creep is unfortunate.

All the usual justifications for enormous salary increases have been used. “Independent Experts” provided advice, past salaries were analysed, and the latest annual review of public sector and state sector chief executives by the State Services Commission were scrutinised.

The treatment of the Chief Executive can be contrasted to attempts to raising the minimum wage. Despite ongoing attempts to make sure that Auckland is a liveable city by at least ensuring that council employees are paid a living wage the Council so far has refused to do so. The costs are not great. In 2013 it was estimated that it would cost $2.5 million a year to do so. The total wages bill for Council in 2014 was $702 million. Reshaping things so that chief executive salary increases are smaller and the increases for the lowest paid are greater will gradually achieve that goal.

A living wage was a campaign policy for Len Brown although the right on Council have managed to stymie it and prevent it from being progressed. And when the Albert Eden Local Board attempted to require the local contractor looking after Swimming pools this was vetoed.

I believe that Auckland Council can contribute to its goal of making Auckland the world’s most liveable city by paying its employees a living wage. All that needs to occur is some discipline when awarding salary increases to the best paid within Council.

And just for the record my company is a living wage employer. And proudly so.



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