The relationship between the Mayor and the CAO is crucial but the CAO is an appointment made by the council and not by the mayor. If this is the end of Paul Murray as CAO, then the council will need to appoint one of the current senior staff to be acting in the role. City Hall can not legally function without someone in the CAO role.
If it comes to hiring a new CAO, which I expect it will, it is the council that will choose the new CAO, not the mayor. I have no idea what happens if there a disagreement between the council and the mayor as to who should get the role.
The compensation package for a new CAO is likely to be broadly similar to the the current one.
What I do not understand is why the rush to get rid of Paul Murray, I have never heard that he was any sort of problem. He was someone that came up through the management ranks of Saanich and was not hired in externally, he seems to be apolitical as far as I can tell