San Jose mayor proposes tying 5% of council pay to measurable citywide performance goals

Mayor Matt Mahan and supporters presented a pay‑for‑performance proposal to tie a portion of city‑council compensation to measurable results on council‑adopted performance metrics, prompting a lengthy debate about design, equity and unintended incentives.

Lede: The proposal would withhold 5% of each councilmember’s base salary at the start of a fiscal year and restore it prorated based on performance against a set of publicly adopted citywide performance measures—metrics that the council would set through the budget process and finalize in a fall readout. The administration argued the change would align elected officials’ incentives with those already applied to senior city managers.

What proponents said. Mayor Mahan described the plan as a way to expand accountability and create a public feedback loop: the council would set explicit hypotheses about which programs and budget choices would move prioritized outcomes (for example, aspects of homelessness, public safety or housing), resource those choices through the budget, and accept public grading of the results. He argued the approach could be implemented under existing charter provisions without the expense of a ballot measure.

Key design points and staff requests. The city manager’s office and city attorney proposed using charter section 407(d) and an ordinance to implement the withhold/repay approach each fiscal year rather than pursuing a charter amendment. Administration asked for more time to return in the fall with a recommended rubric and proposed performance measures; staff said the council could provide initial goals during the June budget process but a final approval cycle in the fall would be prudent.

Concerns and debate. Several councilmembers raised concerns about perverse incentives, the difficulty of setting fair citywide metrics that account for district‑level priorities, and the idea of elected officials deciding their own compensation adjustments. Councilmember McConell (concerns) asked how the proposal could avoid incentivizing short‑term or simplistic decisions to hit targets. Others urged caution about compounded or permanent cuts and asked staff to clarify how the withholding would interact with the salary setting commission and annual CPI adjustments.

Why it matters: The proposal is intended to strengthen transparency and pressure the council and administration to set clear, measurable outcomes and justify budget tradeoffs. Opponents said the plan risks narrowing council priorities, creating perverse incentives, and discouraging prospective candidates; supporters said it matches expectations the council already imposes on executives.

Next steps. Staff requested more time to return with an implementation rubric and recommended performance measures—administration suggested bringing measures back in September rather than June to allow time to align with a newly added focus area and to ensure the measures are well‑designed.