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Universities – take back control of your vice-chancellors’ spiralling salaries

Jan 12, 2018 by

A new code aims to move the media spotlight away from vice-chancellor pay by increasing transparency. But to work, the overhaul must be radical

Mike Ratcliffe is an academic administrator at the University of Oxford

High vice-chancellor pay has captured the public imagination this year. This isn’t a new issue: there’s been an escalator effect for years, linking senior pay to rising tuition fees, while pay for the rest of staff remains static. Suddenly, subject to public scrutiny, universities have been forced to take action with a new voluntary code asking them to justify senior pay over 8.5 times the institution’s average salary. But first, remuneration committees will have to take a long, hard look at themselves and tackle the processes that have led to swelling salaries.

How did we get to this point? As the executive head of the university, vice-chancellors are answerable to their governors, who are normally a mix of internal and external members. A subset of those governors form a remuneration committee and this is where the problems with pay-setting start.

In most institutions, these committees, which monitor the performance of senior leaders against targets and set rewards accordingly, include the vice-chancellor and exclude staff and students. The vice-chancellor leaves the room whenever their pay is discussed, but they’re still far too close to the process. The problems with this setup have been noted by the guidance for the new code, which says the vice-chancellor can’t be a member anymore.

This problem is compounded by the use of benchmarking data from the sector by remuneration committees. These show what other leaders are getting, together with performance targets that have been set for those leaders. The process inevitably leads to inflation in senior pay.

This creates a positive feedback loop: if most universities wants to link pay to the top quartile, and other universities increase their pay, then they’re bound to increase theirs, raising the overall level for the top quartile, and causing other universities to increase their pay in turn.

Source: Universities – take back control of your vice-chancellors’ spiralling salaries | Mike Ratcliffe | Higher Education Network | The Guardian

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