V-cs, it might be time for us to have a talk about a pay review

Accounts show Russell Group rises as politicians focus on executive salaries. John Morgan reports

January 12, 2012

Russell Group universities spent an average of nearly £318,000 on their vice-chancellors' pay, benefits and pensions last year, with the best paid picking up £424,000.

The analysis by Times Higher Education - based on 2010-11 accounts for the 18 of 20 Russell Group universities to have published them to date - prompted union calls for employees to be represented on the remuneration committees that set vice-chancellors' pay.

The issue of boardroom pay is currently at the top of the political agenda, with Vince Cable, the business secretary, considering moves to require the inclusion of employee representatives on remuneration committees that set executive pay in the private sector.

The University of Oxford's Andrew Hamilton was the highest-paid Russell Group vice-chancellor in 2010-11. His total package of £424,000 comprised £371,000 in salary and benefits (up 0.4 per cent on the previous year) plus £53,000 in employer pension contributions.

Staff on the national pay spine also received a 0.4 per cent rise that year.

Next was David Eastwood of the University of Birmingham. His total package rose to £419,000, up from £392,000 in 2009-10 - a 6.9 per cent increase.

The average spend on Russell Group vice-chancellors was £317,742, up from £316,325 the previous year - a 0.4 per cent rise. The comprehensive THE vice-chancellors' pay survey will not be available until all university accounts have been published.

Outside the Russell Group, Baroness Blackstone, former vice-chancellor of the University of Greenwich, saw her salary increase to £224,652 from £206,0 - an 8.9 per cent rise ahead of her retirement last September. The Labour peer, who benefited from employer pension contributions of £31,507, is a member of the government's final-salary Teachers' Pension Scheme, according to Greenwich's accounts.

A yawning gap

A recent government-commissioned review of public-sector pay led by Will Hutton, then chief executive of the Work Foundation, found that the gap between the highest- and lowest-paid staff was greatest in higher education.

The median vice-chancellor's salary was 15.35 times that of staff at the bottom of the Universities and Colleges Employers Association pay spine, the review's interim report found. It also noted that the ratio in the Russell Group was 19:1.

Wendy Piatt, director general of the Russell Group, said its vice-chancellors lead "multimillion-pound organisations that succeed on a global stage". She added that remuneration committees included external "experts" who "understand the importance of attracting and retaining experienced individuals" of the "highest calibre".

Dr Piatt said the average Russell Group vice-chancellor pay increase "was lower than both UK inflation and the country's average pay rise".

Nicola Dandridge, chief executive of Universities UK, said there were "very few increases across the sector" last year.

While some Russell Group heads took cuts in their packages - including University College London's Malcolm Grant (down to £337,655 from £365,131 in 2009-10) and the University of Liverpool's Sir Howard Newby - others enjoyed rises.

The University of Nottingham's David Greenaway received the third-largest package in the Russell Group (up 3.3 per cent to £359,897).

The University of Cambridge spent a total of £312,000 on Alison Richard and her successor, Sir Leszek Borysiewicz, up from £249,000 the previous year when Professor Richard was in the post.

A Cambridge spokesman said £35,000 of the difference was because employer pension contributions were not payable for Professor Richard, while Sir Leszek was also "employed on a higher salary".

An Oxford spokeswoman said Professor Hamilton's remuneration reflected the university's global standing, research output, large turnover and institutional complexity.

Ed Smith, pro-chancellor and chair of council at Birmingham, said Professor Eastwood had "received no increase in base salary in 2010-11...In 2009-10, the vice-chancellor opted to surrender 50 per cent of the performance bonus to which he was entitled. In 2010-11 he received the full sum awarded by the remuneration committee."

The remainder of the rise came because a share of the running costs of the university property in which Professor Eastwood is "required" to live are included in his total remuneration for income tax purposes.

Sally Hunt, general secretary of the University and College Union, said staff would be "baffled" by the fact that some vice-chancellors were receiving "substantial" increases.

She added: "All the main political party leaders are making strong arguments that executives' pay should be subject to proper scrutiny, including by employee representatives. UCU sees no reason why this should not extend to higher education."

Usman Ali, vice-president (higher education) at the National Union of Students, said that at a time of fee rises, "it would be highly inappropriate for vice-chancellors to even think about boosting their already hefty pay packets".

He added: "The potential misuse of additional fee income underlines why students need to be involved in...budget practices."

THE asked the Committee of University Chairs whether it would support proposals for employee representation on remuneration committees. A spokeswoman said that while remuneration policy is a matter for institutions, "we will keep the need for general guidance under review in the light of the government's eventual decisions in relation to the private and public sectors".

john.morgan@tsleducation.com.

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