Who sets the salary?


images (154)The news that a select group of Universities have been paying their Vice Chancellors in excess of half a Million pounds per year comes hard on the heels of research that shows that a small number of charities are paying their CEO in excess of £300,000. The two stories should not be conflated too closely as whilst the average VC earns £260,000 and this compares to the pay of other top end earners in education, the average charity CEO within the top 100 earners, earns £160,000 and there are many very large charities whose pay for their CEO falls well short of this. There are also 163,000 charities in England and Wales, most of whom don’t employ anyone and with total turnovers of much less than £10,000. There are also many ‘lower earners’ who are household names and which run organisations as big as the largest University including organisations such as RSPB and Oxfam. However the setting of salaries in institutions such as Charities and Universities does change when the people at the top are being considered. In other parts of the education institutions there are well recognised salary bands used to ensure that the organisation don’t spend too long on complicated calculations and that unfairness does not creep in. My experience with charities is that the rates of pay within organisations are a compromise between what the organisation can afford and what activities the employee is being asked to do, taking into account pay rates for similar activities elsewhere. In some cases this can lead to complex calculations as few I have worked with carry out roles that are directly comparable to other charities in the same area. However whereas the pay for most workers is based on what their actions are worth to the charity, or perhaps University, in the case of senior positions this can change to take into account a much wider set of parameters such as the cost of replacing the individual, the market rates tends to act to lift salaries, rather than to hold them down as is the case for most workers. The same logic leads to certain MPs to justify their outside interests and substantial incomes as what they are worth.

I would like to live in a society where the criteria for setting salaries and incomes is more comparable for nurses, bin operatives and police officers as it is for CEOs and Vice Chancellors. This means that defences as suggested by the Universities that they are paying what these workers could earn if they went abroad become irrelevant, unless of course we apply the same logic to our doctors and nurses. Instead we should be comparing the functions of a CEO or Vice Chancellor to the work that others are doing in other settings more locally. If the median income for a VC is £260,000 why does the VC for Nottingham Trent University (I recall it being called Nottingham Polytechnic) earn nearly 3 times that sum. If the median salary for Charity CEOs is £160,000 why do the top 3 earners received around £2.4M between them? Indeed if a University VC is doing a similar job to a CEO of a education charity or head teacher, why do they earn more. The argument that they could earn more overseas, is true, but only if one compares these Universities to the wealthiest Universities.

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About ianchisnall

I have a passion to see public policy made accessible everyone who want to improve the wellbeing of their communities. I am interested in issues related to crime and policing as well as in policies on health services and strategic planning.
This entry was posted in Charities, Education and tagged , , , , , . Bookmark the permalink.

One Response to Who sets the salary?

  1. The reasoning that key employees will be lured abroad by high salaries is such a negative viewpoint. Sometimes people in top jobs are so good at their own PR, when they leave you realise they weren’t doing such a great job after all and are eminently replaceable (at a lower salary..!).

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