Remuneration Tribunal releases CEO remuneration determination

On 16 May 2025, the Remuneration Tribunal of South Australia (Tribunal) issued its final determination resulting from its 2025 review of the minimum and maximum remuneration for chief executive officers in the local government sector. This followed substantive submissions from the Local Government Association of South Australia and various councils.

In a previous article (available here), we examined the draft determination issued in January 2025. That draft determination proposed significant changes to the ways councils manage CEO remuneration when compared to original determination issued in 2023.

Norman Waterhouse Lawyers assisted the Local Government Association of South Australia (LGA) in making submissions responding to the draft determination on behalf of the sector, highlighting the complexities and uncertainties that would arise in setting CEO remuneration and ensuring compliance with the legislative framework.

The determination in its final form is substantially similar to the draft version. However, it does include several key differences, which we outline below.

Revised remuneration bands

The Tribunal has largely sought to maintain the remuneration bands proposed in the draft determination, and each council’s position within them. The bands are determined primarily by total operating revenue and further adjusted for projected population growth, population dispersion, distance from Adelaide, and socio-economic advantage or disadvantage.

However, the Tribunal has reduced the applicable minimum amounts for each band proposed in the draft determination (with the exception of the band for the City of Adelaide). For example, the minimum amount for band 7 has been reduced to $190,000, down from the previously proposed amount of $207,650. The maximum amounts in each band are unchanged from the draft determination.

The bands set out in the final determination are as follows:

Clarification regarding superannuation definition

In response to confusion from the sector about the treatment of superannuation in this context, the Tribunal has stated that superannuation:

“Includes employer superannuation contributions, any salary sacrifice component, and any additional payments made by a Council.”

The above amendments clarify that where a council contributes in excess of the minimum employer contribution amount, the superannuation component should also be increased accordingly when calculating the total remuneration for the purposes of compliance with the determination.

This is especially important to councils which provide tailored superannuation arrangements to their CEOs and may include accumulation-based schemes and defined benefit funds, with varying employer contributions that must be included as part of the total remuneration package.

When and how does the Determination apply to councils?

The new determination ‘takes effect’ from 1 July 2025. Councils should accordingly (if they have not already done so) begin turning their attention to their respective CEO’s remuneration packages and whether they align with the applicable remuneration bands.

However, it is also important to note that the Tribunal has extended its proposed 'phased in compliance' scheme to all councils (not just those who pay their CEO more than $5,000 above or below the relevant band as originally proposed) and has extended the deadline for compliance to 31 December 2027 (out from 1 January 2027 as originally proposed).

Generally speaking, this extension allows more councils more time to achieve compliance with the applicable remuneration bands. However, whether and the extent to which this scheme may assist each specific council will depend upon factors including the specific terms and wording of the contract between that council and its CEO.

Given the potentially unclear operative dates and complexity surrounding the components that may or may not form part of a CEOs’ remuneration, we are happy to assist councils in determining when, and to what extent, the final determination affects their existing and future CEO total remuneration packages.

Other observations

In view of the limited number of amendments since the release of the draft determination earlier this year, and particularly considering the various representations made by the LGA and other councils, we note that the determination in its final form still does not seem to take into consideration certain factors and challenges facing many councils, most notably the difficulties in attracting and retaining CEOs in regional and rural areas. Councils in these areas may therefore need to give increased consideration to devising non-remuneration-based methods of retaining talent.

Councils may also continue to face challenges in accurately quantifying their CEOs’ total remuneration packages due to the absence of clear guidance on the appropriate methods for calculating certain components, such as the motor vehicle component and housing allowance.

There may also be difficulties in negotiating appropriate reductions to a CEO’s employment package where this is required in order to ensure compliance with the determination.

We would be pleased to advise upon the specific circumstances of any council, including with respect to:

• What date is the relevant date from which the Council must comply with determination;
• What aspects of the CEO’s terms and conditions of employment fall within, or outside of, the concept of ‘remuneration’ for the purpose of the determination;
• Whether any particular proposed non-remuneration-based way of improving talent retention would or would not be permissible; and
• Any other matter arising from the determination or the employment relationship between the council and its CEO more generally.

We would also be pleased to assist councils with any communications or negotiations with their CEOs which may be necessary in order to ensure compliance with the determination.

Should you have any questions arising from the above or require any advice, please contact Sathish Dasan on +61 8 8210 1253 or sdasan@normans.com.au, Chris Alexandrides on +61 8 8210 1299 or calexandrides@normans.com.au, or Annabelle Narayan on +61 8 8210 1292 or anarayan@normans.com.au.