Reprinted with permission from the July 2009 issue of Public Management (PM)
magazine published by ICMA, the premier local government leadership and management
organization, located in Washington, D.C.
Scenario No. 1:
The city manager landed a new position with another community. The feelings of
appreciation for all that he had done for the community during his 15-year tenure
evaporated quickly when it was disclosed that his take-away compensation was nearly
two times his annual salary. The final payout was for his unused vacation days,
sick leave, executive pay, and other accrued benefits.
All the items had been duly laid out in an employment agreement negotiated when he
was initially hired. No doubt the city's tight budget in the economic downturn,
higher unemployment among the residents, and news of the recent excesses of Wall
Street contributed to turning the spotlight on this situation.
Comparisons with Wall Street compensation levels are not fair as the compensation
provided to public service executives is nowhere near what managers in the higher
levels of the private sector earn. Those who dedicate their careers to public service
have no expectation of earning such amounts. Lack of transparency, perceptions of greed,
and questions about whose interests are being served can, however, play out on both
Wall and Main streets.
The interests of the local government manager and the employing jurisdiction are
separate and sometimes in conflict when the terms and conditions of employment are
being negotiated. ICMA members have a responsibility to be reasonable, fair, and
clear about what is being requested. Elected officials have an obligation to seek
advice, from either internal resources or a third party, as they cost out compensation
requests. This is one instance where a member's duty to the public's interest and duty
to his or her own interest are not identical.
One challenge, of course, is that the governing body in place at the end of the agreement
may not be the one that carried out the initial negotiations. Other unforeseen factors
can make those initial negotiations now seem unwise. After an employment agreement is
negotiated, however, both parties have an ethical obligation to comply with the terms
of the agreement. The public we serve will judge whether there was true value for the
Scenario No. 2:
The county manager's employment agreement states that she will receive an annual bonus
as part of the county's compensation program. In the early years of her tenure, the
county commission was supportive of her efforts, and the bonus amount was decided in
a private conversation with the board chair. The county manager never asked for formal
approval as the board chair told her that he was authorized to represent the wishes of
the full commission.
Years went by and the process remained the same. When an entirely new group of
commissioners was elected, commissioners were stunned to learn that the manager
had received the largest bonus available every year of her tenure without formal
approval by the commission.
If the compensation standard, metric, or amount is not spelled out clearly in the employment
agreement, always seek and obtain approval of the governing body before accepting a bonus or
other compensation. Don't take a bonus that you have determined on your own or one that has
not been formally approved.
Scenario No. 3:
During the most recent election cycle, one candidate ran on a platform of reducing
government waste and improving services. His strategy for accomplishing this goal?
Replace the city manager! The candidate won the election and appeared to have a
majority on the council.
The manager had negotiated a modest severance in his initial agreement. The council president
who lost his bid for reelection to this candidate strongly suspected the manager would be
terminated after the new council took office, and he approached the manager with a proposal
to increase his severance. The manager wondered whether a severance increase under these
conditions would be ethical.
Perceptions that we are feeding at the public trough are harmful to the profession. Even
if the outgoing governing body agrees to change the severance provisions, will it appear
to the public that it's just another golden parachute (albeit a small one) to the
The best time to negotiate a reasonable severance provision that will provide some
financial security for you and your family is at the beginning of employment or during
a normal contract renegotiation. Members are encouraged to use the ICMA Model Employment
Agreement, which can be downloaded from the career resource center at
Have you encountered an interesting challenge while negotiating compensation or benefits
or collecting them? Please feel free to share your experience with ICMA by sending me an
email at email@example.com.
All stories or comments will be considered confidential unless otherwise noted.