CEO 18.2% Pay Rise Council Workers 1.2% Pay Rise

On February 7th, 2012, about 300 protesters marched to the Kapiti Coast emergency management building after it was revealed last week that the Chief Executive Officer (CEO) of the Kapiti Coast District Council Patrick Doherty was given a $44,000 increase in his salary.  This generated a great deal of outrage in a local authority where approximately a third of its residents are NZ Superannuation recipients who earn around $20,235 a year [1].


At a time when many thousands of workers in the area face pay cuts, pay freezes and job losses this announcement did not go down well

What angered many people wasn’t just the pay increase but that it came at a time when at least two major council projects – the upgrading of the main street of Otaki township and the construction of the Aquatic Centre - have seen their budgets blow out to the tune of several million dollars. 

In trying to justify Doherty’s pay increase the Kapiti Coast District Council made the remark that the increase would bring his salary up to a similar level to that of the Porirua City Council’s Chief Executive Officer, arguing that Porirua City has a similar size and population to that of the Kapiti Coast.  In doing so, she further raised the ire of many local people who noted that Porirua’s city council is more proactive in the local community and funds many community and social projects that the Kapiti Coast District Council isn’t.  It was rather like comparing apples with oranges, to borrow the overworked cliché.

Councillor K Gurunathan went even further in his justification for Doherty’s pay increase by stating that he was a key figure in overhauling the Wellington emergency management committee in response to lessons learned from the Christchurch earthquakes where many deficiencies in emergency management responses were exposed.  While this is certainly commendable it was not part of his job description as CEO of the Kapiti Coast District Council.

As is often the case with local body politics things began to take a turn for the ugly when it was revealed in the February 8th Kapiti News that the key organiser of the February 7th protest, Murray Cooper, was the owner of R V Cooper and Co. Ltd who had been awarded $4,302,638 in council contracts between 2003 and 2008 who had lost his contracts when changes in council staffing and contracting services processes came into effect.

Whether this is a smear campaign aimed at deflecting criticism of the CEO’s pay increase remains to be seen but discrediting critics of pay hikes for executives has been a time honoured action of the capitalist class when they have come under attack.

For Marxists the question of what is an appropriate compensation for a job has always been fairly straight forward: “To each according to their ability, to each according to their need.” Does this mean that a CEO of a local authority deserves an 18.2% pay increase? The answer is simple: No. And, it is not a case of politics of envy as is often alleged by the bourgeoisie but a much more fundamental concept of natural justice.

It is the workers that produce the wealth of a local community. It is the workers who produce the goods and provide the services within the community, not the managers or the CEOs. It is the working class that should own that wealth and decide how it is distributed and used for the greater good of both society and the working class. 

Considering the average Kapiti Coast District Council worker has had an average 1.2% increase in wages – not even enough to cover the cost of inflation – an 18.2% pay increase for a CEO is obscene, especially at a time when working families are struggling to survive and being told to tighten their belts.

[1] Based on the gross rate for a person who is single and living alone.