CEO $380,000 termination payment explained

Council Administrator, Dick Persson

Central Coast Administrator, Dick Persson, has issued a statement to explain his decision to make a $380,000 termination payment to former Chief Executive Officer, Gary Murphy.

“Ratepayers’ anger about my decision to agree to a full payout of the former CEO’s contract is totally understandable,” Persson said.

“I was angry too.

“I was angry because, as I said in my 30-Day Report, the former CEO did not adequately perform key parts of the role and, therefore, was a major contributor to the financial decline confronting the Council.

“So, why did I agree to it?

“I spent a lot of time challenging the legal advice and working through the contract.

“While I accept responsibility for my decision, I don’t believe I had a realistic alternative given the provisions of the contract and the laws governing employee legal rights.”

“So, why pay 38 weeks salary to someone who I felt had not performed to an acceptable level?

“The contract lays out several options to remove a CEO.

“The option I ultimately agreed to provided the most clear-cut path.

“No reason needed, but 38 weeks’ pay.

“The path to remove a CEO for unsatisfactory performance (still with 13 weeks’ pay) would have required me to conduct a performance review and then provide the CEO an opportunity to respond.

“This process would have taken at least eight weeks.

“Proving the poor performance would have been made difficult by the previous Council having determined his performance as ‘meets expectations’ in the two previous CEO performance reviews.

“This timetable also assumes that Mr Murphy was available to be interviewed.

“On two occasions, I requested a meeting and he declined to meet.

“Given all this, I stand by my decision as the best for the long-term future of the Council, its ratepayers and staff.”

Persson said he regretted that he could not find a better way forward.

Persson said having reached that decision, a new CEO was needed to lead Council through the challenging times ahead.

Therefore, the most important thing was to remove the former CEO quickly to allow the recruitment of the new CEO to commence.

“Recruiting a new CEO typically takes three to four months, so getting started became the major priority,” he said.

Information Source: Facebook Page, Dick Persson, Administrator January 8, 2020

Share this story