The chancellor wasn't really evil. He was just assisting King Poseidon as it was his job, but at the end he couldn't even say he was his friend.

He did serve as the secondary antagonist

Yes, but he did very little evil stuff aside from encouraging King Poseidon to use snails for their slime. El Diablo and Poseidon are both pure evil, and even Plankton was more evil than the chancellor.