Hambleton Council said the payment to Phil Morton was part of a redundancy settlement that will save the authority money in the long term.
The payment was revealed in a report from the Taxpayers’ Alliance which showed 121 council staff across Yorkshire were paid more than £100,000 last year, a fall of six compared to the previous 12 months.
Mr Morton, who was paid £397,967, announced his retirement in February 2016 as part of the authority’s plans to cut £1m from its budget. He was succeeded by the authority’s deputy chief executive whose previous role was scrapped.
A Hambleton Council spokeswoman said: “In 2015/16 Hambleton District Council’s chief executive retired upon taking voluntary redundancy - the payment was made in line with [the] council’s corporate policy and as part of a management restructure, which deleted the post of deputy chief executive resulting in significant savings.”
The region’s biggest council, Leeds, had the most employees earning in excess of £100,000 at 18.
A council spokeswoman said it had worked “incredibly hard” to maximise budget savings while protecting frontline services as far as possible.
She said: “ One area on which we have focused is in reducing staff numbers, particularly among senior management, saving £55m a year in staffing since 2010. This is reflected in the fact that despite being the second-biggest council in the UK, we are only 19th in the table of local authorities with staff paid over £100k.”
John O’Connell, chief executive of the TaxPayers’ Alliance, said: “There are talented people in the public sector who are trying to deliver more for less, but the sheer scale of these packages raise serious questions about efficiency and priorities.”