Higher education pay survey, 2013

With a few exceptions, vice-chancellors’ remuneration did not rise vertiginously in 2011-12 - a good thing politically. But are they still paid too much compared with their peers?

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Source: David Lyttleton

Whether it was Vince Cable, the business secretary, on “out of control” executive salaries, Eric Pickles, the communities and local government secretary, on “bloated” pay for town hall chiefs, or Occupy protesters on the steps of St Paul’s Cathedral targeting the so-called “1 per cent”, the issue of high pay remained in the public spotlight throughout the past financial year.

With pay freezes for millions of public sector workers and the UK double- dipping into recession, many from outside the 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 the political mainstream with a vengeance?

Not too badly, according to an analysis of 2011-12 university financial statements by the accountancy firm Grant Thornton for Times Higher Education.

When salaries, bonuses and benefits are considered, almost two-thirds of the UK’s vice-chancellors and principals - 98 in total - received increases greater than the £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 the remaining third who did not receive a pay rise, about 20 had their pay frozen and some 25 took a pay cut, although some changes reflect costs associated with a change of office.

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

The pay of George Holmes, vice-chancellor of the 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 the university’s remuneration committee to “incentivise the vice-chancellor to remain at Bolton to secure stable leadership during a time of change”, a spokesman for the 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, the university said that about 92 employees could be made redundant, although last week a spokesman stated that the restructuring process had concluded “with only seven compulsory redundancies”.

The pay of Nick Petford, vice-chancellor of the 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 the university’s remuneration committee after Northampton made great strides in research, education, student satisfaction and graduate employability, a spokesman for the institution says.

The committee adds that Petford’s “starting salary…was a low base compared with the sector median” and that “competitive salary packages” were needed to attract good senior staff to lead the university.

Another 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 the helm of the University of Bedfordshire.

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

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

Benchmarking exercises were mentioned by the remuneration committees at the University of Warwick and at Durham University as reasons for large pay increases for their 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 other leading universities in the UK”, a spokesman for the university says.

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

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