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The Committee of University Chairs has published a new voluntary code for setting the pay of senior university staff.
The guidelines, which follow consultation on a draft published in January, has been criticised as being a "watered down" version of the original version and "woefully inadequate" by academic union leaders. But it has won support from politicians, and CUC chair Chris Sayers insisted it represented "a major step in tackling the issue of Vice-Chancellor pay" and provided "a strong basis for the sector to demonstrate its commitment to transparency".
The key points of the new code are set out below. According to CUC, they are based on the principles of "fairness, transparency, and independence". The code will be reviewed every four years, in consultation with the sector.
Element I - A fair, appropriate and justifiable level of remuneration
Remuneration starts with a clear understanding of the responsibilities, context and expected contribution of a roleand the attributes required to undertake that role effectively. Fair and appropriate remuneration then recognisesan individual’s contribution to their institution’s success in that role, and is sufficient to recruit, retain and motivatestaff of appropriate calibre in the context of the market for that role, balanced with the need to demonstrate theachievement of value for money in the use of resources.
Principlesa) Remuneration should take account of the context in which the institution operates.b) Remuneration must be linked to the value, based on a number of components, delivered by an individualacting within a role.c) Remuneration must consider matters of equality, diversity and inclusion with a view to ensuring thatthere are no biases pertaining to gender or other protected characteristics within the pay structure.d) Institutions should be clear about what they expect from staff, i.e. what is ‘normal’ and what is‘exceptional’. There should be a robust and consistent process for setting objectives and assessing anindividual’s contribution.e) Remuneration can vary according to individual performance.4f) Awards made in respect of annual bonus arrangements linked to the achievement of specific annualobjectives should not be consolidated.g) From time to time the value of a role may need to be reviewed in light of changing conditions, sustainedperformance, experience etc.h) Non-achievement of an individual’s expected contribution should have consequences.i) Any severance payments must be reasonable and justifiable.j) There should be a clear and justifiable rationale for the retention of any income generated by anindividual from external bodies in a personal capacity.
Element II – Procedural fairness
Procedural fairness requires remuneration to be set through a process that is based on competent people applyinga consistent framework with independent decision making using appropriate evidence and assessing the value ofroles, the context and individuals’ performance in them.
Principlesa) Senior post holder remuneration should be determined in the context of each institution’s approach torewarding all of its staff, and in particular, consideration should be given annually to the rate of increaseof the average remuneration of all other staff.b) No individual can be involved in deciding his or her own remuneration.c) Remuneration Committees must be independent and competent.d) The head of the institution (HoI) must not be a member of the Remuneration Committee.e) Remuneration Committees, when considering HoI remuneration, must be chaired by a lay governor whois not Chair of the governing body.
Element III - Transparency and accountability
The process for setting remuneration must be transparent. For senior post holders there must be an institutionalleveljustification for remuneration that relates to the competitive environment, the value of the roles andinstitutional performance. The remuneration of the HoI must be separately justified, published and related to theremuneration of all staff within the organisation.
PrinciplesEach institution must publish a readily accessible annual statement, based on an annual report to itsgoverning body, containing:a) a list of post holders within the remit of Remuneration Committee;b) its policy on the remuneration for post holders within the remit of Remuneration Committee;c) its choice of comparator institutions/organisations;d) its policy on income derived from external activities;e) the pay multiple of the HoI and the median earnings of the institution’s whole workforce, illustrating howthat multiple has changed over time and, if it is significantly above average; and explanation of why, andf) an explanation of any significant changes
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