New rules on UK vice-chancellors’ pay ‘woefully inadequate’

The final version of a new code governing UK vice-chancellors’ pay says that universities must be prepared to justify their decisions if their leaders’ salary is in the highest sector quintile compared to average staff remuneration, but unions have described the rules as “woefully inadequate”.

The voluntary Senior Staff Remuneration Code for Higher Education, published by the Committee of University Chairs on 6 June, says that vice-chancellors should not sit on the remuneration committees that decide their salaries.

It says that institutions should give consideration to the “rate of increase of the average remuneration of all other staff” when setting the vice-chancellors’ pay, and that institutions should publish the pay multiple of the vice-chancellor compared to the median earnings of the whole workforce, “illustrating how that multiple has changed over time and, if it is significantly above average, an explanation of why”.

“Institutions that position themselves in the highest quintile will need to be prepared to provide additional explanations to stakeholders and their regulators as to why this is desirable,” the guidance says.

The guidance, a draft of which was published in January, is intended to respond to widespread concern about high levels of executive remuneration in UK higher education.

Chris Sayers, the CUC chair, said that universities needed to “balance the need for recruiting the best talent with the need to demonstrate value for money”.

“We are confident the new code will promote more transparency and improve the public’s understanding of and confidence in how decisions around pay are made,” said Mr Sayers, chair of governors at Northumbria University.

But the University and College Union said that the code did not go far enough, highlighting that many vice-chancellors still attended remuneration committee meetings, leaving the room when their own salary is discussed, even if they were not members of the panel.

“This woefully inadequate code is nothing more than another plea for restraint to a group of people who have ignored every previous request,” said Sally Hunt, UCU’s general secretary. “It is staggering that it does not even ban vice-chancellors from attending the meetings where their pay is set. A bizarre gentleman’s agreement where the boss steps outside while their pay is discussed is not how you tackle excessive pay.

“The embarrassing comparisons some vice-chancellors have made between themselves and bankers and footballers, or the pride they have taken in their Bentleys and yachts, has demonstrated how out of touch they are.”

Nicola Dandridge, chief executive of the Office for Students, said that England’s new regulator would soon set out increased expectations for transparency about and justification of executive pay. Where institutions breached regulatory conditions, “we will not hesitate to intervene”, she said.

“In recent years there have been a number of cases where the levels of pay for some vice-chancellors, and increases in their pay, are out of kilter with pay levels elsewhere, and that must change,” Ms Dandridge added. “Vice-chancellors, and the governing bodies of universities, now need to show real leadership on this issue. While the code provides useful guidelines, tough questions need to be asked about high pay in the sector.”

The Times Higher Education vice-chancellors’ pay survey, published in February, showed that university leaders were paid an average of £268,103 in salary, bonuses and benefits in 2016-17 – or £289,756 when pension contributions were included.

chris.havergal@timeshighereducation.com