Top talent does not come cheap

April 5, 2002

The key issue of v-cs' pay is not size but performance and accountability, according to Walter Greaves.

Philip Love argued in The THES (March 22) that properly paid staff at all levels are necessary for the success of higher education and the economy. Nobody could disagree: the question is, what are the proper levels?

Vice-chancellors' salaries are determined by independent lay members of remuneration committees who are experienced in executive and non-executive roles in business and the public sector. They are aware of the rates of pay in higher education and other sectors, plus the benefits and the outside earnings (within limits) that v-cs enjoy. They also recognise that salaries can make a difference to the performance of an institution, and this starts with attracting the right person.

Salaries can spur performance by rewarding the specific contribution, achievement and effort of a v-c. Accordingly, a proportion of v-cs' pay should be linked to performance. This approach, which requires clear objectives and thorough review, reduces uncertainty over whether v-cs earn their money, yet only universities operate an incentive scheme.

There are some disturbing trends in v-cs' pay: big rises just before retirement; the appointment of new v-cs at much higher salaries than their predecessors; and a growing pay disparity between v-cs and their senior staff. Big increases before retirement may be justified as rewards for good performance or pay-offs to move a v-c out. But they cannot be justified as custom and practice or a golden parachute.

It may be necessary to improve a salary package to attract the right person, but the current average increase of more than 20 per cent is too high, particularly with the transferable pensions that academics enjoy. Such big rises add to the sector's already too high staff turnover, now more than 15 per cent, which needs addressing.

The growing disparities in pay merit more attention from remuneration committees, although it is difficult to see where the money would come from for an overall levelling-up. Lay and staff governors must question and be better informed about remuneration-committee decisions, and there should be no bar to their scrutiny. Confidentiality is not an issue because v-c salary figures are published. So, ultimately, universities get the v-c and v-c's salary their councils deserve.

The anger over the v-cs' pay league is another example of how, in their governance role generally, councils and boards of companies are under increasing scrutiny. Council membership is no longer a cosy experience, particularly for lay members who have great commitment to a university because their reputation is closely linked to it.

Since lay members give a lot of time and expertise to higher education free of charge, it is a miracle that we continue to find high-quality people prepared to serve. Maybe it is time to ask if their direct contribution should be as recognised and as rewarded as that of other non-executives on public and private bodies.

Walter Greaves is chair of council at Brunel University and a board member of the Universities and Colleges Employers' Association.

* Should v-cs' pay be performance-related and how? Email soapbox@thes.co.uk

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