Checklist: Setting executive salaries

Governance expert Lynn Cadman advises on deciding pay levels for senior managers

Lynn Cadman says salaries should be benchmarked against other organisations of a similar size
Lynn Cadman says salaries should be benchmarked against other organisations of a similar size

Remuneration for charity bosses has been a hot topic over the past year, so what principles should you apply when setting the salaries of your charity's executives?

Delegate to a remuneration committee of trustees and, preferably, one or more independent board members to review salary levels and make recommendations to the board of trustees.

That committee should benchmark salaries against other organisations, including private companies, of a similar size working in the same field.

Factor in risk level and profile. If the charity's work is high risk and/or very high-profile, this should be reflected in the pay of senior staff.

Ensure recommendations to the board include sufficient information about the benchmarking undertaken, and that the minutes record how the various factors have been assessed in reaching a conclusion, including how salary increases compare with the charity's own growth.

Report in the charity's audited accruals accounts (if applicable) the number of employees receiving emoluments for the year of £60,000 or more, in line with the Sorp.

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