Chief executive salaries 'have risen in line with charity income over five years'

Joe Saxton of the consultancy nfpSynergy says its research demonstrates that senior pay is not out of control but correlates strongly to income and costs

Joe Saxton
Joe Saxton

The salaries of chief executives at 50 of the UK’s best-known charities have risen almost exactly in line with the income of those charities over the past five years, according to research by the consultancy nfpSynergy.

Based on an analysis of their accounts filed with Charity Commission, researchers found that between 2007 and 2012 the total income of the 50 charities increased by an average of 17.7 per cent, equivalent to an average of 3.5 per cent a year.

Over the same period, their chief executives' salaries increased by an average of 18 per cent, researchers found.

The charities’ total staff costs rose by an average of 24.2 per cent, an average of 4.85 per cent a year, over the five years.

Charities are rebalancing chief executive salaries based on market forces, the report says.

It says that the charities that paid their chief executives less than £100,000 in 2007 increased those salaries by an average of 38 per cent by 2012, whereas those that paid more than £100,000 in 2007 had an average increase of 6 per cent.

Broadly, the report shows that the higher the charity's total income, the higher the chief executive's pay, although not all the charities followed the pattern.

Figures for 2012 show one unnamed charity, with an income of £385m, paid its chief executive a salary of £105,000. Another, with an income of £37.5m, paid its chief executive £125,000. 

NfpSynergy’s report says that a number of charities with the highest-paid chief executives had reduced those salaries by 2012.

Chief executive pay was thrust into the spotlight in August when The Daily Telegraph published details of executive salaries at 14 aid charities.

Joe Saxton, co-founder of nfpSynergy, said: "Back in the summer, it was easy to get the impression that the pay of some of the chief executives at Britain’s best-known charities was out of control.

"What our research shows is that chief executive pay is highly correlated to the total income of the charity and to the staff costs.

"So on aggregate, far from chief executive salaries growing massively while their organisational income faltered, the two are closely linked. The task now is to persuade the British public that charity chief executives are worth what they earn, and that an effective chief executive is critical to donations being professionally raised and professionally spent."

The 50 charities include those with the highest levels of awareness, according to nfpSynergy’s regular Charity Awareness Monitor, and include all the UK’s best-known charities, nfpSynergy said.

- See our Big Issue on chief executive pay

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