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CUC publishes new code on senior university staff pay

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 role
and the attributes required to undertake that role effectively. Fair and appropriate remuneration then recognises
an individual’s contribution to their institution’s success in that role, and is sufficient to recruit, retain and motivate
staff of appropriate calibre in the context of the market for that role, balanced with the need to demonstrate the
achievement of value for money in the use of resources.

Principles
a) 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 individual
acting within a role.
c) Remuneration must consider matters of equality, diversity and inclusion with a view to ensuring that
there 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 an
individual’s contribution.
e) Remuneration can vary according to individual performance.4
f) Awards made in respect of annual bonus arrangements linked to the achievement of specific annual
objectives should not be consolidated.
g) From time to time the value of a role may need to be reviewed in light of changing conditions, sustained
performance, 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 an
individual 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 applying
a consistent framework with independent decision making using appropriate evidence and assessing the value of
roles, the context and individuals’ performance in them.

Principles
a) Senior post holder remuneration should be determined in the context of each institution’s approach to
rewarding all of its staff, and in particular, consideration should be given annually to the rate of increase
of 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 who
is 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 institutionallevel
justification for remuneration that relates to the competitive environment, the value of the roles and
institutional performance. The remuneration of the HoI must be separately justified, published and related to the
remuneration of all staff within the organisation.

Principles
Each institution must publish a readily accessible annual statement, based on an annual report to its
governing 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 how
that multiple has changed over time and, if it is significantly above average; and explanation of why, and
f) an explanation of any significant changes

 

 

kendrysdale / 123RF
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