> This story has been amended; see final paragraph
The Consumers’ Association, the charity behind the Which? publications and brand, has set aside bonus payments totalling more than £1.4m for four senior staff members working for its commercial arm, its latest group accounts show.
The charity set up a long-term incentive plan in the financial year ending June 2013 to encourage senior staff to deliver "transformational commercial growth" of the organisation. Under the terms of the deal, four senior members of its commercial team could double their salaries if they exceed growth targets for the three-year period to the end of June 2015.
A source close to the Consumers’ Association told Third Sector that the scheme and the setting of high executive pay had caused concern among some of the charity’s "ordinary" members – subscribers to the charity’s products who have certain voting rights – and that their objections had been made known to the charity’s council of trustees.
The charity's latest accounts, published on the Companies House website last week, say that each of the four staff members in the scheme will receive a "target payment" of at least an additional 50 per cent of their salary for each year if they achieve growth of between 22 per cent and 32 per cent over the three-year period, and of 100 per cent of their salary for each year if they achieve growth of more than 33 per cent over the three-year period. They will not receive any incentive payments if growth is less than 22 per cent.
The accounts show that the charity allocated £1,075,000 towards the long-term incentive scheme in the financial year to June 2014, and £361,000 in the previous financial year, bringing the total amount set aside for long-term incentive payments so far to £1.4m. The accounts add that the payments will be made only once growth has been assessed by independent valuation experts.
The accounts do not name the four people involved in the scheme or state their roles. However, the accounts for the year to June 2013 said that the four staff members involved in the scheme earned between £170,000 and £320,000. A spokeswoman for Which? said that the four directors were all employed by Which? Ltd, the Consumers’ Association’s principal trading subsidiary.
The latest accounts show that the income of the Consumers’ Association increased to almost £95m in 2014 from £87m the previous year, an increase of about 9 per cent. They also show that the charity spent more than £22m on charitable activities, almost exactly the same amount as the year before.
The accounts say that a second incentive scheme was created during the financial year to June 2014 to "incentivise exceptional growth" in new ventures over a period of three years. One employee was included in this scheme, but the accounts do not say on what basis this money will be awarded.
A spokeswoman for the charity said in a statement: "We can categorically state that no payments have been made under the long-term incentive plan, which operates solely for a small number of commercial directors and not for staff employed by the charity. No payments will be made under the long-term incentive plan unless independent valuation experts assess there to have been exceptional growth in our commercial businesses.
"As an independent social enterprise, we do not accept any donations or government funding, so we can only continue our charitable work for all consumers if we sustain our commercial success."
> This story has been clarified to show that these are the charity's group accounts and to further emphasize that the four staff members in the incentive plan work for its commercial arm.