Exeter v-c’s ‘extraordinary’ bonuses worth almost £400K

Latest remuneration figures bring prospect of more criticism for UK universities

December 13, 2018
Whirlwind of money machine
Source: Getty

UK universities face another winter of discontent over vice-chancellors’ remuneration after it emerged that one leader is set to pocket bonuses worth almost £400,000 on top of his £400,000-plus annual pay package, while another received £563,000 last year, including a £242,000 pay-off.

Sir Steve Smith, vice-chancellor of the University of Exeter, was paid £409,000 in pay and bonuses in 2017-18, as well as receiving £14,000 in benefits, taking his overall remuneration to £423,000, according to the institution’s newly published accounts.

Exeter’s latest financial statements reveal that Sir Steve, who has led the university since 2002, will also receive a “performance-related award” in 2019-20 expected to be £180,000, which is linked to meeting “long-term performance targets”.

If Sir Steve continues in post until August 2020, he will also receive a “retention payment” of £105,850, the accounts add.

Exeter has also agreed a “post-termination” agreement with the former Universities UK president, under which he will receive another £105,850 if he is “not employed by or provide[s] consulting services to competitor institutions for a period of 12 months following the expiry of his contract” in 2020.

An Exeter spokesman said that the “conditional, target-led and long-term incentive scheme [was agreed] in 2013” and “reflected the value and importance of the vice-chancellor’s experience, guidance and expertise to the achievement of the university’s strategic objectives”.

The no-competition payment would “protect the university’s commercial and strategic interests” and “ensures the vice-chancellor’s considerable experience and skills will be at the disposal of the university for a further 12 months, if required”, he said.

The spokesman added: “It is important to stress that if payments under these schemes are triggered in 2020 and 2021, they will reflect the vice-chancellor’s commitment and outstanding performance against challenging targets over a long period of time.”

Matt Waddup, the University and College Union’s head of policy and campaigns, criticised the deal, stating that “picking up bonuses of this magnitude after you have left is quite extraordinary”.

“It would appear that universities have learned nothing from the scandals that have been so damaging for the sector in recent years, or they simply don’t care,” he added.

The publication of the full details of Sir Steve’s bonus package comes after England’s new regulator, the Office for Students, introduced more rigorous reporting rules for senior management pay. It now requires institutions to release details of future bonuses and the value of subsidised accommodation provided to university leaders.

However, it means that universities face a fresh round of criticism over executive remuneration, after negative headlines forced the introduction of new guidelines earlier this year.

In their latest accounts, institutions estimate the gross market value of properties provided for their leaders. Several in London report particularly high figures, reflecting rental costs in the capital. These include UCL, which said that the rent-free accommodation provided for president Michael Arthur was worth £83,200 a year, while the value of the residence provided for Baroness Valerie Amos, director of Soas University of London, was £54,080.

Meanwhile, latest accounts also show that Peter Horrocks, who quit with immediate effect as vice-chancellor of the Open University in April amid a staff revolt over his leadership, received £242,000 in severance pay, in addition to his £321,000 basic salary in 2017-18.

Once benefits, including the £38,000 cost of subsidised accommodation, and his £13,200 legal costs are included, Mr Horrocks’ overall remuneration was £629,200 that year, while another £89,000 in salary and benefits went to his successor Mary Kellett for the final three and a half months of the academic year.

An Open University spokeswoman said that the “settlement figure includes pay in lieu of notice, compensation for loss of office and legal advice”.

Times Higher Education survey of available financial statements shows, however, that relatively few university leaders took large basic pay rises in 2017-18 – a year in which vice-chancellors’ pay became a national talking point.

One of the highest year-on-year pay rises seen by THE was awarded to Anthony Forster, vice-chancellor of the University of Essex, whose basic salary rose £31,909 to £289,183 – a 12.4 per cent increase.

Once housing costs and employer pension contributions are included, his overall pay package stood at £378,084. Judith Judd, Essex’s chair of council, said that Professor Forster’s pay, set by the remuneration committee, “reflects our belief that he is an outstanding leader who has played a vital role in transforming our students’ experience”.

jack.grove@timeshighereducation.com

POSTSCRIPT:

Print headline: Exeter boss set to take home almost £400K in bonuses

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Reader's comments (2)

Captain Louis Renault here. I have to say, 'I'm shocked. Shocked to find that gambling is going on in here.'
Well, if you don’t know where to throw away your money, go to the University of Essex. They do a lot of marketing to attract as many students as they can, but they cannot accomplish what they promise. Once the student is enrolled there, they are left completely on their own. On another note, the brutal architecture isn’t very pleasant to look at, the food is overpriced and of bad quality. Internet quality is also very bad and slow here. I wonder how they can execute scientific applications with the level of quality that is there currently.

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