The Chief Executive Salary Trap

A short piece I wrote for a recent LGC section, reproduced with their permission.  All the other stories, including an analysis by LGC that shows that contrary to past trends many incoming CEs are now paid less than the incumbent, is here.

Two years ago many authorities found that upward CE salary pressures meant they had to pay more for a new Chief Executive than they had been paying to a very experienced and able incumbent.  This often presented some real political difficulties and local outcry, perhaps most famously at Suffolk CC.

Now, as the LGC analysis shows, we are seeing that trend reversed, and salaries for new CEs are less than that of the previous incumbent.  Some of this reflects the mood of the times, and Chief Executives are pretty pragmatic folk – whatever their reputation for uncaring venality as articulated by various government spokespeople.

The reality of this is that the pool of candidates for these top jobs will be different as a result of this change.  There are some superb candidates whose personal circumstances mean they can move sideways, or even take a small pay cut, to get a more challenging and attractive job, but some of the more experienced and able CEs are painted into a salary corner and now see that their next progression step is linked to an unaffordable salary drop.  This in turn will mean less movement and fewer bridging opportunities for those coming through.

We will see some very able but relatively inexperienced people leap-frogging a “stuck generation” into more senior jobs.  There are people in that next generation who are very capable of this, but the depth of assessment and testing they will need to check their ability, and the onboarding support they need, will be greater – but then they will fly.

Meanwhile there will be a need for the stuck generation to be mindful of the need to reinvent themselves and their approach to keep themselves fresh, and valuable in a context where they look expensive.  We will see more shared CEs, and we may even see CEs undertaking paid work alongside their core role to reduce the cost to the authority.

All of that will come to pass if trends continue – but it will be interesting to see if the fundamental reality reasserts itself – there is a shortage of really top talent, and a desperate need for it.

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