Regulator asks Marie Stopes International to explain salary package of £434,000

The Charity Commission is also thought to be working on a report about executive pay in the sector

(Photograph: Tommy London/Alamy Stock Photo)
(Photograph: Tommy London/Alamy Stock Photo)

The Charity Commission has asked Marie Stopes International to explain why the charity decided to award its chief executive a salary package of £434,500, half of which included a bonus.

The regulator is also understood to be working on a report about executive pay in the charity sector once it has collected new 2018 data on the take-home pay of charities’ highest earners, expected to be ready by the end of October.

Earlier this month, Third Sector revealed that the highest earner at the charity – understood to be its chief executive, Simon Cooke – received a basic salary of £217,250 and a performance-related bonus of the same amount in 2018.

After the former charity chief executive Mark Flannagan wrote a blog piece for Third Sector criticising the move, there was further criticism in the mainstream media, and this weekend the Daily Mail and The Sun on Sunday ran articles examining high pay in the sector.

In a statement about the Marie Stopes International case, Helen Stephenson, chief executive of the Charity Commission, said: "We have asked the trustees to set out the process they followed in making decisions around the chief executive’s remuneration, and to explain how they took into account the potential impact of the chief executive’s pay on public perceptions of the charity, and the charity’s reputation among donors, supporters and beneficiaries.

"The charity has responded; we are carefully reviewing their response and considering our next steps. The actions of one charity can impact on the reputation of all charities."

The commission cannot legally direct charities to adopt particular rates of pay for their highest earners, but it can ensure that charities follow due process and comply with their legal duties and responsibilities when reaching a decision.

When asked by Third Sector to comment, a spokesman for Marie Stopes International said the charity had nothing to add to its previous statement on the issue.

That statement said the chief executive’s total remuneration package "is set by the board of trustees, as part of their duty to ensure our organisation has the best leadership in place to deliver against ambitious targets".

Marie Stopes International’s chief executive pay would be high enough to make the top ten of Third Sector’s 2019 charity pay study, which found the highest salary in the sector was between £3.17m and £3.18m for a member of the Wellcome Trust’s investment team.

Transparency around senior pay in the charity sector has also long been a problem, with research by Third Sector earlier this year showing that only 57 of the 155 charities that make up Third Sector’s Charity Brand Index of the top charities named their highest earners in their annual reports and accounts.

That research also found that the average highest salary at the charities on the brand index was £126,806, compared with £125,403 the previous year.

The latest annual return requires charities to provide the Charity Commission with the exact remuneration of their highest earners, and it is understood the regulator will publish a report based on that data to improve transparency on the issue.

The data for most charities is expected to be available before the end of October this year.

Stephenson said in a statement issued to the two newspapers that published the analysis of charities’ executive pay that it would be "looking closely at" executive pay in the future.

"The public expects all charities – regardless of their size and complexity – to demonstrate they are spending every penny wisely, and to show that everything they do and every decision they make helps deliver on the charity’s purpose and upholds the special status charities have," she said.

"How much charities pay their senior staff, and how they arrive at these decisions, must touch on all these principles. This is an area the public cares about, and it matters to us as regulator. Indeed, we are now looking closely at senior pay in charities."

The commission’s latest strategy, which was released in October last year, said that the regulator would use its position to call out poor practice in the charity sector and prioritise raising public trust.

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