The chief executive of Which? could earn more than £500,000 next year and two other senior executives could each earn more than £300,000 under a further incentive scheme created by the consumer rights charity.
Earlier this week, Which? published a mid-year review that showed four directors, including group chief executive Peter Vicary-Smith, had this year received payments of between £400,000 and £542,000 as part of a long-term incentive plan to grow its commercial operations between 2012 and 2015.
The review also said it had two further incentive plans in place to help encourage commercial growth in subsequent years. Under the first of these schemes, Vicary-Smith and two other senior executives from the commercial team could double their salaries in 2016/17 if Which? grows its group valuation by about 30 per cent between 2013 and 2016.
Under the second scheme, the three directors could receive up to 70 per cent of their salaries in 2017/18 if Which? grows its group valuation by about 20 per cent between 2014 and 2017.
Which? said in its mid-year review on Wednesday that it estimated Vicary-Smith’s pay would be £433,000 in 2016/17 once incentive payments were taken into account, but added that the actual amount could be signicantly lower or higher depending on its commercial performance. Third Sector asked Which? if Vicary-Smith’s pay could exceed £500,000 in 2016/17 – it did not dispute this figure.
Vicary-Smith currently receives a basic salary of £235,000, which is split 70 per cent to 30 per cent between its commercial and charitable activities.
Which? did not disclose the names of the other two directors in these two later incentive schemes in the mid-year review, but a spokeswoman confirmed yesterday that they were Chris Gardner, managing director of Which? Publishing, and Jacques Cadranel, group finance director of Which?. Gardner was paid a basic salary of £181,000 in the financial year to 30 June 2015 and Cadranel received £153,000. Both Gardner and Cadranel also received bonus payments under the first scheme, which ran between 2012 and 2015.
Which? intends to honour these further incentive payments despite the recent criticism over the setting of high pay. Which? declined to provide additional comment about these plans but said in the mid-year review that the incentive schemes had been approved and overseen by the remuneration committee that is appointed by its council. The committee is made up of council members and the chair of the Which? Limited board.
The mid-year review said: "The committee approved the formation of the long-term incentive plan in September 2012 and carefully assesses the appropriateness of each new long-term incentive plan scheme, including ensuring that valuation targets are appropriately stretching."
Tim Gardam, the recently appointed chair of Which?, defended the charity’s decision to award the incentive payments in The Times, but admitted that the sums were "very big indeed". He added that it would not be paying such large sums during his time as chair.
Patrick Taylor, a Which? subscriber who has been campaigning for reforms at the charity, told Third Sector: "I hope it stamps on these types of bonuses because it deprives the charity of money that could be put to better use. These payments also show how out of touch the trustees are with their membership."