Opinion: Hot issue - Should salaries of UK chiefs follow the US trend?

Last week, Professor Nicholas Deakin warned that salaries for sector chief executives in the US were "going off the scale" and suggested that the UK sector should avoid adopting what he thinks is an unfortunate trend.

NO - DAVID FIELDING MBE, not-for-profit director, Rockpools

Making comparisons between the US and the UK not-for-profit space is unhelpful. It's like comparing apples to oranges. In the US, there is more convergence between the private, public and not-for-profit sectors, compared with the UK. There are fewer structural and cultural barriers between sectors, and philanthropy and planned giving are leagues ahead, as is the general quality of leadership and professionalism. There is also a stronger flow of talent between sectors, where diversity flourishes and talent and outcome is rewarded.

The economic rules of supply and demand do have an impact here, and the increase of salaries within the UK not-for-profit world is inevitable and necessary. But why, as a sector, are we failing to see real diversity at the top? Look no further than the 'gentlemen amateur' attitude that still exists. It is not good enough to expect senior leaders to work in the sector as a favour. This attitude is exclusive and patronising, and needs to stop. The forthcoming Acevo/Rockpools chief executive remuneration survey (19 October) will add further evidence to this debate. Progress, particularly on the gender front, is to be applauded, but there is much more to be done. Talent, delivery and outcome need to be rewarded, not apologised for.

YES - OLGA JOHNSON, chief executive, Charity Recruitment

As a headhunter committed to recruiting the best people, I know how important it is to pay the 'going rate'. As a trustee, I am also aware that charities operate in a tough, competitive market, and they are constantly scrutinised by regulators, the public and the media. So being a charity chief executive is a tough job - and it's getting tougher.

I applaud the increasing number of chief executives coming in from outside the sector. They bring new ideas and a fresh perspective, and they are joining a sector that, so far, has managed to increase its professionalism without compromising values.

Of course, charity chief executive salaries will continue to increase.

They need to if we are to continue to attract the best talent as the sector increases its influence. Research by Computer Economics indicates that charity chief executives still earn up to 50 per cent less than their commercial counterparts, so there is still a way to go.

We must all ensure that proven strategic competence and commitment to a values-led sector are at the top of our selection criteria. Then salaries won't go 'off the scale' because those in it for the money won't make it to the shortlist.

NO - PAUL VALENTIN, international director, Christian Aid

I think that any chief executive of a large organisation with many employees and a responsibility towards society would expect to receive a salary that reflects that level of authority.

Christian Aid operates in a market where there is competition for good-quality people who we want to attract. But for the voluntary sector there is also a built-in assumption that we are dependent on the public's generosity and their willingness to give money. So while we should defend the fact that we pay decent salaries, that doesn't mean we can pay off the scale.

The development in the US voluntary sector is a very unfortunate one. It follows the private sector, where we know that the link between performance and financial remuneration is not a strong one. There are even chief executives of failing companies who receive staggering levels of compensation.

We should continue to stretch the expectations of supporters, who sometimes feel we could do it all as volunteers, and pay realistic salaries to our staff, who live in the real world. But that is far removed from a situation where you follow market standards and pay off the scale. It would be a betrayal of public trust if we were to go down that path.

YES - KENNETH HOFFMAN, fundraising consultant, Boston

Executive managing in charities requires more skills than in profit-making enterprises. On a daily basis, the charity chief must solve the essential financial conundrum - convincing funders that a different set of constituents is addressed effectively. How much simpler to sell a gewgaw when payment and constituency are one.

But resistance to higher compensation is deep-rooted - much of the public in the UK and the US still hold a Dickensian view of charity. In my charity days, one bank officer said he envied the "psychic income" I derived from my work. The reality is that charities paying under market rates will, in the end, be staffed by short-termers or employ a disproportionate number of the independently wealthy.

In a rare confluence of good policy and regulation in the US, the Internal Revenue Service explicitly permits charities to consider private sector rates when setting compensation. This is not licence for excess. It comes with the responsibility for every trustee to vote on the chief executive's compensation. The numbers are on annual returns, available to all on GuideStar.

Such transparency eliminates many abuses, though not all.

The US rarely has answers suitable to the UK, but it has got this one right.

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