After my first two blogs about the newspaper-driven debate over chief executive pay, I’ve received a lot of feedback. Most has been support from charity workers, but there has been a fair bit of opposition, too, from charity workers and others. It’s clear that this debate is far from won, even within the sector.
As I’ve said before, I’d like to see trustees engage with audiences inside and outside the sector, and make the case more clearly to justify the salaries they pay.
Here, basically, is what I would say if I was a trustee of an aid charity…
“We are an organisation that works every day to save lives. We think hard about how to do that better. It is ridiculous to expect us to do this without being effectively led.
Our view is that a chief executive is not an expense of dubious value. They are a vital necessity. We the trustees – who don’t get paid anything, by the way – are not spending this money because we want to provide pocket-lining sinecures or a gravy train for our friends. We’re paying what we need to get the person we want.
Maybe you think we could find someone who could do the job well for less. We spent a long time thinking about it and decided that we couldn’t.
Perhaps you could identify an “astute businessman at the end of his career” who understands the logistics of aid, fundraising and managing a network of hundreds of shops, is a good man-manager and fluent communicator, and is able to comprehend the complexities of the charity VAT regime, the politics of sub-Saharan Africa and the inner workings of Whitehall. Ideally this individual should also be willing to work extremely long hours and take flak about their personal circumstances from MPs and media organisations. He or she should be willing to earn about the same wage as an account manager in a fresh produce business or senior quantity surveyor.
We have not encountered such people.
It’s true that we’re paying our leaders quite a lot. But it’s a damn sight better than having someone who can’t do the job.
To all those who claim that “we have to pay the market rate” isn’t a good argument – you are simply wrong. There are no chief executives of £300m-a-year organisations who are paid next to nothing – whether those organisations are companies, charities or councils. We do not necessarily agree with the way these pay structures have evolved. And actually we pay miles below the market rate, compared to commercial businesses. But we can’t divorce ourselves completely from the market, or no one would come and work for us. You do realise, don’t you, that this isn’t a part-time voluntary position? Aid work is the only job our employees have.
In any case, why should charities pay less than other sectors? There seems to be a view that if someone is making the world worse they can be paid what they want and spend what they want. But if someone is doing something good with their life, everyone’s entitled to stand around and criticise them. Someone, somewhere, has looked around and said: “Virtue is its own reward, mate – you can’t have cash as well.”
Well, why not? Charity workers, unlike others, labour every day to improve the world they live in. Why should our employees be paid less than those in other sectors? If anything, they deserve to be paid more.”