Signs of pay restraint among Russell Group ‘fat cats’

Source: Rex Features

Tokens of restraint: most rises were modest, but one package grew by £59,000

Government calls for pay restraint among vice-chancellors appear to have been heeded after the latest figures for Russell Group heads showed mainly modest salary rises last year.

The average salary for a Russell Group vice-chancellor rose by just £3,100 to £297,600 in 2013-14, according to a Times Higher Education analysis of 19 of the group’s 24 members.

Once pension payments by employers are taken into account, those vice-chancellors pocketed an average overall total of £328,600 – up from £324,500 in 2012-13.

It means an average salary rise of 1.1 per cent and a 1.3 per cent increase in overall benefits – broadly similar to the 1 per cent pay rise agreed with rank-and-file staff that year.

The pay awards follow criticism of the previous year’s 9.5 per cent average pay hike for Russell Group leaders, which led Vince Cable, the business secretary, to warn about the “substantial upward drift of salaries” in February’s grant letter to the sector.

The largest pay rise was awarded to Sir Keith O’Nions, the outgoing president and rector of Imperial College London, whose overall remuneration rose by £59,000 to £389,000 in his final year, an 18 per cent increase.

Sir Keith’s remuneration is, however, dwarfed by that of his successor, Alice Gast, who chose to declare her £421,000 pay package when she took office in September.

An Imperial spokeswoman said that Sir Keith’s remuneration reflected the demands of running a “globally renowned institution”. A one-off payment of £50,000 was awarded in January 2014 “in recognition of his contribution to the development of the college and the size of the role at Imperial”.

Sir Steve Smith, vice-chancellor of the University of Exeter, enjoyed a 17 per cent pay rise in 2013-14 after he was awarded a £58,000 performance-related bonus.

That took his overall emoluments to £400,000, which Exeter said recognised an “unprecedented period of success in recent years”.

Sir Steve had declined to accept any bonus in 2012-13, while his basic salary had remained static for the past two years, which meant that his basic salary had fallen in real terms since 2010, added Sarah Turvill, who chairs Exeter’s council and remuneration committee.

There was also a pay rise for Sir David Eastwood, vice-chancellor of the University of Birmingham, whose pay rose by £10,000 to £410,000, the highest declared basic salary within the sector.

However, six of the 19 universities whose financial statements were available either kept their vice-chancellors’ pay package the same or lowered it.

London School of Economics director Craig Calhoun’s £394,000 pay package was substantially lower than the £466,000 paid in 2012-13, which was partly attributable to a one-off £88,000 sum for relocating to London in his first year of office.

In its accounts, the LSE also declared that the estimated market rent of Professor Calhoun’s subsidised accommodation last year was £120,000. No other university made a similar declaration. The LSE said that it is common practice for universities to provide housing for a vice-chancellor near to campus, and it had been used for hosting students, alumni and faculty for decades.

On the modest pay rises awarded overall, Mike Shattock, visiting professor of higher education management at UCL Institute of Education, said he believed that universities had finally been influenced by ministerial warnings on pay.

“It is also true that most pre-92 universities operate on a two- or three-year cycle, so you would see one or two flat years followed by a review,” said Professor Shattock.

“My guess is that everyone [was] waiting for the [research excellence framework] results. Would it not be embarrassing if you gave your vice-chancellor a large rise and then the university lost ground in the REF?”

jack.grove@tesglobal.com