The council voted on Monday night to offer Mr Dodd a new five-year contract with a $165,000 salary, 22 per cent more than last year.

Councillor Allan Reynolds said a $30,000 increase was "ridiculous" when many people in the community were "tightening their belts to have a normal lifestyle".

"I just can't see how Geoff or another CEO can be worth that much," he said.

"A person in our community may be struggling to pay their rates and we're paying our CEO $165,000; I don't think the council can afford it."

Other councillors also expressed their concerns about the rate of increase but as far as CEO wages go it is still at the lower end of the spectrum.

Mayor Peter Davis said the average wage for council CEOs in South Australia was $167,000 this year and the average for provincial city CEOs, not including Port Lincoln, was $170,000 last year.

Councillor Mick Bascombe defended the increase saying it reflected that Mr Dodd had proved himself as a CEO and the salary still put him "at the bottom of the table for comparable councils".

"When the council employed Geoff as CEO four and a half years ago he had no track record as a CEO, hence he started at a fairly low salary.

"In May 2010 (when his current contract expires) he will have been a CEO of a large regional council with five years' experience and that dictates he be paid accordingly."

While the Port Lincoln council has a lot less staff (43 full time) than other councils with similarly paid chief executives, Mr Bascombe said it was a council decision to outsource a lot of work, which had to be supervised.

"Whether it's morally right or morally wrong unfortunately you have to look at what similar organisations are paying; if we don't do it now we'll have to do it sooner or later," Mr Bascombe said.

"If Geoff moves on and we have to pay someone else a $60,000 or $70,000 increase in one go it will hit us a lot harder."

He said the CEO Review Committee had not made the decision lightly and members believed Mr Dodd had done an admirable job, with the council in the top 10 per cent of sustainable councils in the State.

The offer includes annual incremental increases in line with the council staff Enterprise Bargaining Agreement but no longer includes performance bonuses.

If Mr Dodd accepts the new contract it will begin in May.