Peter Stanford: Big pay for charity chiefs makes me feel queasy

In an age of austerity and public sector pay freezes, large salaries and bonuses for charity chiefs do not sit well

Peter Stanford
Peter Stanford

Charities cannot stand apart from the public debate about "fat-cat" salaries. Indeed, in some ways they are more under scrutiny. When you are raising money from the public to fund work that is often among the most needy and vulnerable people in our society, paying your chief executive more than the Prime Minister is a tricky decision for trustees to make, as Marie Stopes International has discovered in recent weeks.

Its 2018 accounts show that the highest earner at the charity received a basic salary of £217,250, plus a performance-related bonus that took the final sum up to £434,500. And that’s when the rest of us are paying £150,000 for Boris Johnson.

In response to headlines, MSI has argued that its trustees agreed such a package "as part of their duty to ensure our organisation has the best leadership in place to deliver agreed ambitious targets". Umm… How does that sound to you?

I have to admit that it makes me feel a bit queasy in an age of austerity and pay freezes in the public sector, and when average wages in Britain have fallen by 1 per cent in real terms since 2010, according to recent research from the trade union movement.

But let’s put that queasiness to one side. If we start giving in to queasiness right now about the way the world is going, we will be in the sick bay for years to come.

The case MSI makes – and has been making annually in recent years, given its consistently high level of remuneration compared with other large charities whose median headline figure is estimated at £150,000 – is that at its income is going up, to a whopping £296.8m, enabling it to avert 12.3 million unintended pregnancies and 6.4 million unsafe abortions.

The question then remains whether the reasons given for the scale of what is assumed to be the remuneration package for MSI chief executive Simon Cooke sufficient to justify what the trustees have agreed? I could quibble.

If the chief executive is going to be on three times the median salary because MSI is doing so well, have all its employees been on three times the going rate in the sector for their jobs, too? Yes, all organisations require leadership, and that is a rare quality, so you have to pay over the odds.

But from bitter experience I can confidently report that good fundraisers are also in scarce supply, and without them you are definitely sunk. So let’s hope the largesse spreads beyond the very top of the tree and has trickled down, as the economic theory goes.

The exact details of all this, of course, are known only to the MSI trustees, and the statement they have put out makes it plain they don’t intend to engage in further discussion.

But I wonder if that is how all trustee boards should proceed: that this is their business and no one else’s? There are, I would suggest, risks in such a strategy, most obviously because charity accounting rules now insist that the highest salary paid be listed in the annual return.

That requirement has been put in place precisely because the regulators believe the public has a right to know how the charities they fund use donated money.

So, yes, trustees have to take into account how the charity is performing, how the chief executive is hitting targets and the going rate in the marketplace for such a high-calibre individual. But they also have to weigh a more emotional public reaction.

Will it put donors off? Or will it just make them feel queasy for a moment or two, before they think it through and dig into their pockets again. My gut feeling is that it might be the former.

As a trustee I would exercise caution, but the MSI approach to senior pay over the past few years suggests the answer is the latter.

Peter Stanford is a writer and broadcaster, and was a charity chair for more than 20 years

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