Villa could not match that hike but O'Neill says he would not be deterred from offering his influential skipper a sum that would effectively dwarf that of the club's other high earners as a sweetener to stay.
"We're in the business of professional football, trying to achieve as much as we possibly can knowing your competitors are putting high stakes on things," he said. "I would set out the same principle at every football club.
"If players are doing really well and are deserving of new contracts or renegotiated deals, I have not got a problem.
"It's all about merit and I will treat each case on its merits. I have to be aware of outside forces but within this club that's not a problem to me. That's how we did it at Celtic and Leicester. Anyone who walks through the door and asks me how they fit in on any given day of their contractual life, it's not a problem.
"Some people can walk through the door in September and ask 'where am I positioned'? or they could walk in December in an absolutely different position, either brilliantly or not.
"I have never known a player to come in who has done poorly and ask if they can renegotiate their contract downwards.
"I haven't seen it and I'm not expecting to see it in the rest of my managerial time.
"However, on the other side, if someone is worth something here and he's doing so well, to reward him by either putting him above or alongside his peers - because that's where we stand at the time - I have not got a problem with it.
"If players sign contracts then I have to assume that the signing of a contract means they're happy to sign and they're not unhappy three days later."