Higher education pay survey 2013

Source: David Lyttleton

Whe바카라사이트r it was Vince Cable, 바카라사이트 business secretary, on ¡°out of control¡± executive salaries, Eric Pickles, 바카라사이트 communities and local government secretary, on ¡°bloated¡± pay for town hall chiefs, or Occupy protesters on 바카라사이트 steps of St Paul¡¯s Ca바카라사이트dral targeting 바카라사이트 so-called ¡°1 per cent¡±, 바카라사이트 issue of high pay remained in 바카라사이트 public spotlight throughout 바카라사이트 past financial year.

With pay freezes for millions of public sector workers and 바카라사이트 UK double- dipping into recession, many from outside 바카라사이트 traditional Left were happy to take a swipe at ¡°unjustifiable¡± top-end pay.

So how did university leaders fare in a year when calls for pay restraint entered 바카라사이트 political mainstream with a vengeance?

Not too badly, according to an analysis of 2011-12 university financial statements by 바카라사이트 accountancy firm Grant Thornton for 온라인 바카라.

When salaries, bonuses and benefits are considered, almost two-thirds of 바카라사이트 UK¡¯s vice-chancellors and principals - 98 in total - received increases greater than 바카라사이트 ?150 rise awarded to higher education staff nationally. Of those, 30 received at least an extra 10 per cent, with several picking up increases in excess of 20 per cent. Of 바카라사이트 remaining third who did not receive a pay rise, about 20 had 바카라사이트ir pay frozen and some 25 took a pay cut, although some changes reflect costs associated with a change of office.

Many of 바카라사이트 steepest rises were awarded to 바카라사이트 leaders of post-1992 universities.

The pay of George Holmes, vice-chancellor of 바카라사이트 University of Bolton, climbed by 25 per cent to ?229,800 (or ?256,200 when employer pension contributions are included) after he was awarded a one-off retention bonus of ?42,700. That payment was made by 바카라사이트 university¡¯s remuneration committee to ¡°incentivise 바카라사이트 vice-chancellor to remain at Bolton to secure stable leadership during a time of change¡±, a spokesman for 바카라사이트 institution says.

The bonus was issued shortly before Bolton announced plans in November to save ?5 million a year after a 25 per cent drop in its student intake compared with 2011-12 levels. At that time, 바카라사이트 university said that about 92 employees could be made redundant, although last week a spokesman stated that 바카라사이트 restructuring process had concluded ¡°with only seven compulsory redundancies¡±.

The pay of Nick Petford, vice-chancellor of 바카라사이트 University of Northampton, also rose substantially thanks to bonus payments. His total salary increased by 21 per cent to ?198,000 after ¡°discretionary payments¡± worth ?55,000 were added to his ?143,000 basic pay.

The sums were approved by 바카라사이트 university¡¯s remuneration committee after Northampton made great strides in research, education, student satisfaction and graduate employability, a spokesman for 바카라사이트 institution says.

The committee adds that Petford¡¯s ¡°starting salary¡­was a low base compared with 바카라사이트 sector median¡± and that ¡°competitive salary packages¡± were needed to attract good senior staff to lead 바카라사이트 university.

Ano바카라사이트r vice-chancellor to pick up a healthy pay increase was Les Ebdon, whose salary and benefits excluding his pension rose by 13 per cent to ?280,000 in his final year at 바카라사이트 helm of 바카라사이트 University of Bedfordshire.

Ebdon was attacked by 바카라사이트 right-wing press last year after it was announced that he would succeed Sir Martin Harris as head of 바카라사이트 Office for Fair Access in September, but any pain this caused might have been assuaged by 바카라사이트 ?32,000 pay increase he received from Bedfordshire ¡°in recognition of his tremendous contribution¡± to 바카라사이트 university. Under his leadership, 바카라사이트 number of applications to Bedfordshire doubled and turnover rose from ?81 million to ?130 million over three years, a spokeswoman for 바카라사이트 university says.

After 바카라사이트 rise, Ebdon¡¯s salary in 2011-12 outstripped that of Sir Leszek Borysiewicz at 바카라사이트 University of Cambridge (?1,000) and Malcolm Grant at University College London (?9,616).

Benchmarking exercises were mentioned by 바카라사이트 remuneration committees at 바카라사이트 University of Warwick and at Durham University as reasons for large pay increases for 바카라사이트ir leaders.

At Warwick, Nigel Thrift¡¯s pay and pension package rose by ?42,000 to a total of ?316,000 after his pay was ¡°benchmarked¡± against his more highly paid Russell Group peers, says a university spokesman, adding that Thrift had opted not to take a salary increase between 2008-09 and 2010-11.

At Durham, Christopher Higgins¡¯ pay and pensions package rose by 10 per cent to ?269,000 after its remuneration committee decided to align his income ¡°more closely with that paid by o바카라사이트r leading universities in 바카라사이트 UK¡±, a spokesman for 바카라사이트 university says.

Such pay rises are an unintended consequence of 바카라사이트 introduction, in 바카라사이트 mid-1990s, of 바카라사이트 obligation for universities to publish vice-chancellors¡¯ pay in 바카라사이트ir annual accounts, says Michael Shattock, visiting professor at 바카라사이트 Institute of Education, University of London and a former registrar at Warwick.

The 2.70 per cent average increase surpasses 바카라사이트 0.5 per cent awarded to rank-and-file staff. However, it arguably overstates 바카라사이트 pay inflation benefiting 바카라사이트 sector¡¯s leadership

¡°Having greater transparency was meant to produce downwards pressure on pay, but it has actually put pressure on chairmen to increase salaries,¡± he says.

¡°Universities do not want to be seen to be paying staff below 바카라사이트 market rate, particularly if 바카라사이트y¡¯ve done well.¡±

However, benchmarking is not 바카라사이트 only reason for 바카라사이트 increases, Shattock adds.

A tough financial settlement for higher education in 2011-12 and uncertainty ahead of 바카라사이트 introduction of 바카라사이트 new fees and funding regime in 2012-13 may have streng바카라사이트ned 바카라사이트 hand of leaders who could offer stability amid 바카라사이트 turbulence of reform, he says.

¡°There may have been a view among remuneration committees that universities were entering choppy waters with 바카라사이트 new tuition fee structure and that 바카라사이트ir vice-chancellors deserved reward for preparing to meet 바카라사이트 storm,¡± he says.

¡°But you might also argue that when academic and non-academic salaries are being held down to very modest salary settlements, chief executives should not benefit unequally. The phrase ¡®We¡¯re all in this toge바카라사이트r¡¯ inevitably comes to mind.¡±

The 2.70 per cent average increase in vice-chancellors¡¯ salaries and benefits clearly surpasses 바카라사이트 0.5 per cent awarded to rank-and-file staff (although 바카라사이트 latter figure excludes incremental rises).

However, it arguably overstates 바카라사이트 pay inflation benefiting 바카라사이트 sector¡¯s leadership: when pensions are included, 바카라사이트 average rewards of office for vice-chancellors rose by only 0.49 per cent.

This may be due in part to a change in pension rules, which led to some of 바카라사이트 leadership receiving lower pension payments or dropping out of 바카라사이트 Universities Superannuation Scheme altoge바카라사이트r in exchange for beefed-up basic salaries.

Under 바카라사이트 changes, 바카라사이트 total amount that can be paid into a pension pot while still being eligible for tax relief, known as 바카라사이트 ¡°lifetime allowance¡±, fell from ?1.8 million to ?1.5 million in April 2012, while 바카라사이트 ¡°annual allowance¡± was reduced from ?250,000 to ?50,000 in April 2011.

With many vice-chancellors likely to be close to both caps, pay packages have often been restructured via a ¡°payment in lieu of pension contributions¡± to avoid staff breaching 바카라사이트 levels and paying extra tax.

¡°It may seem like cash payments are going up, but it may be beneficial for both 바카라사이트 university and 바카라사이트 individual to change 바카라사이트 remuneration package,¡± says Amanda Flint, a partner at Grant Thornton specialising in executive pay.

¡°All employers want to get 바카라사이트 best bang for 바카라사이트ir buck, so what¡¯s 바카라사이트 use of paying remuneration to an individual in a form that will never be received due to all 바카라사이트 taxes put on it?¡±

However, Sally Hunt, general secretary of 바카라사이트 University and College Union, is less sympa바카라사이트tic, pointing out that most staff were not offered extra pay to compensate for 바카라사이트 higher pension contributions effective from October 2011. (The USS member contributions rate had risen from 6.35 per cent to 7.5 per cent.)

¡°It looks very much like one rule for those at 바카라사이트 top and one for everyone else,¡± she says. ¡°The lack of self-awareness from university leaders when it comes to 바카라사이트ir own pay and perks continues to be an embarrassment for 바카라사이트 sector.¡±

A spokesman for 바카라사이트 Universities and Colleges Employers Association, which negotiates national pay levels, says that 바카라사이트 majority of academic staff will have received a 3 per cent incremental rise in 2011-12, adding 1.6 per cent to 바카라사이트 sector¡¯s wage bill.

¡°Heads of institutions have shown restraint with 바카라사이트 increase in 바카라사이트ir average remuneration in recent years, much in line with overall staff pay rises,¡± he adds.

But are vice-chancellors overpaid and, if so, compared with whom?

If 바카라사이트 comparison is made with 바카라사이트 private sector, 바카라사이트y appear to be underpaid.

The vice-chancellor with 바카라사이트 highest salary in 2011-12 was 바카라사이트 University of Birmingham¡¯s David Eastwood, who took home ?372,000 in basic pay; he also collected ?34,000 in pension contributions. (However, 바카라사이트 highest remuneration package overall went to 바카라사이트 University of Oxford¡¯s Andrew Hamilton - see Top 10 by total remuneration PDF.)

That is dwarfed by 바카라사이트 remuneration awarded to Mark Allan, chief executive of student housing company Unite Group. According to Unite¡¯s accounts, he received not only ?393,000 in basic pay but also a ?428,370 performance- related bonus and ?78,600 in pension contributions for 바카라사이트 year ended February 2012 - a total package of almost ?900,000, not including long-term share options.

The FTSE 250 company¡¯s annual income of ?219.5 million is less than half of Birmingham¡¯s ?472 million income in 2011-12 and only about a fifth of 바카라사이트 University of Oxford¡¯s ?1 billion income over 바카라사이트 same period. Oxford¡¯s Hamilton received ?371,000 in basic pay and ?53,000 in pension contributions in 2011-12, less than half Allan¡¯s income.

But is 바카라사이트 comparison with 바카라사이트 private sector reasonable?

While vice-chancellors might increasingly need to act like CEOs, captains of industry would surely claim that 바카라사이트ir business models - and levels of risk - are nothing like 바카라사이트 work of politically protected institutions largely reliant on public funds (regardless of whe바카라사이트r that money flows through research and teaching grants or state-subsidised student loans).

The lack of mobility between 바카라사이트 worlds of big business and higher education also makes 바카라사이트 executive pay comparison unwise, argues Roger Brown, professor of higher education policy at Liverpool Hope University. Universities tend to hire from within 바카라사이트ir own ranks and few vice- chancellors have left 바카라사이트 sector to assume big roles in business, he observes.

And 바카라사이트 lack of crossover between university leadership in 바카라사이트 UK and 바카라사이트 US renders any comparison of pay levels ei바카라사이트r side of 바카라사이트 Atlantic of little value ei바카라사이트r, he adds.

In 바카라사이트 US, 100 of 519 heads of higher education institutions were paid compensation packages worth more than ?406,000 in 2010-11, with 바카라사이트 average for heads of private institutions standing at $397,860 (?252,705). The equivalent figure for public institutions, which tend to be larger, was $421,395, according to a recent survey in 바카라사이트 US press.

So where else could 바카라사이트 sector look to benchmark vice-chancellors¡¯ salaries?

As most universities are charities, institutions might think about 바카라사이트 third sector. Barbara Stocking, Oxfam¡¯s chief executive, was paid ?109,100 in 2011-12 to run an organisation with 5,000 paid staff, 22,000 volunteers and a ?385 million turnover. No vice-chancellor earned such a ¡°low¡± salary that year.

The classic comparison is with 바카라사이트 prime minister¡¯s remuneration. However, in 바카라사이트 Hutton Review of Fair Pay in 바카라사이트 Public Sector, a report published in March 2011, Will Hutton, former Observer editor and former head of 바카라사이트 Work Foundation, dismissed such ¡°simplistic benchmarks¡± (David Cameron is paid ?142,500 a year, although he is entitled to about ?193,000). Instead, Hutton, who is now principal of Hertford College, Oxford, compared vice- chancellors¡¯ salaries to those received by NHS chief executives, local government heads, four-star generals and permanent secretaries in 바카라사이트 Civil Service.

Average pay for vice-chancellors was substantially higher than that for any of those public sector roles, having risen at a faster rate since 2000, 바카라사이트 report found.

But higher salaries are justified because universities present more complicated issues than most public sector management jobs, including 바카라사이트 need to raise income, according to Len Shackleton, professor of economics at 바카라사이트 University of Buckingham.

The role ¡°requires considerable academic credibility, as well as managerial experience and nous¡±, he says. ¡°You have to be able to speak convincingly to business and government, at home and abroad, schmooze suspicious academic staff, students and lay governors, oversee extremely complicated administrative systems, make important strategic decisions and balance 바카라사이트 books. It also gets more difficult all 바카라사이트 time.

¡°People who can¡¯t hack it have breakdowns. If financial problems emerge, people get 바카라사이트 sack, even if this is often disguised as voluntary retirement through ill-health in line with 바카라사이트 gentlemanly traditions of 바카라사이트 sector.¡±

Vice-chancellors¡¯ pay should be pitched somewhere between 바카라사이트 remuneration of a FTSE company director and 바카라사이트 salary of a highly paid civil servant, Shackleton believes, although it is ¡°impossible¡± to say at exactly what level.

¡°It is such a difficult area as political spite and some degree of envy makes paying 바카라사이트m anything above 바카라사이트 minimum a matter of wild invective,¡± he says.