While the agreement was reached before this month’s local elections, it was not publicly announced until after voting concluded.
A statement from the council this week said the decision followed a "robust and fair" process, in line with the council’s obligations as a good employer.
"While the council recognises the timing, close to the local elections, has prompted discussion, the decision was required within a contractually defined timeframe and was made in the best interests of the district’s continuity and stability during a period of significant change."
Under the Local Government Act, a first-term review of the chief executive’s employment must be done 12 months before the expiration of the initial five-year contract.
Councillors had the option to decide to extend that contract for a two-year period or advertise the position as vacant, which the chief executive could reapply for.
A council spokesperson said the decision to offer Mr Parmley an extension of two years was made by a vote of the previous council following his performance review on September 9.
The new contract was not finalised until October 6.
"With the election, the announcement was deferred until after the new mayor and councillors were sworn in.
"The chief executive has the full support of the newly elected mayor and councillors."
Mayor Melanie Tavendale said she was looking forward to working with Mr Parmley.
"I believe that Alex has an enormous amount to offer the district with challenging times ahead and the stability he brings to the organisation is important."
Following the announcement, the newly-sworn-in councillors issued a joint statement.
"The decision to extend Mr Parmley’s contract means the newly elected council can focus on the many government-led reforms affecting local government and allow [him] to reach his performance targets and make Waitaki the best place to be."
Mr Parmley thanked the mayor and councillors for the "fair, thorough and well-managed" review of his employment.
"I look forward to continuing to deliver on the direction and priorities they set for the organisation in this triennium in line with our aim to becoming a leading, innovative council, which delivers the best for our communities."
He became chief executive in July 2021 after leading South Somerset District Council in the United Kingdom.
The main thrust of his tenure has been the council’s sometimes controversial transformation programme, which so far has involved staff restructuring (a 9% reduction), unifying services and introducing digital upgrades.
