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What trustees should be saying over chief executive pay

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.”

  • Sarah Bissell

    Bravo. 100% agree, I just cannot understand how it can be difficult to understand that if you pay peanuts you get …..! It feels like the sector may be being pushed back into the dark ages. Having worked at the British Red Cross I think Nick Young is worth every penny!

  • Mark Atkinson

    Well said David.

  • Richard Tomlins

    So we’re setting the benchmark for peanuts as £100k? Would say 60k not be reasonable salary and not “peanuts” and sufficient to attract someone of high calibre or maybe 50k? Interestingly Christian Aid adopted a “email us and we’ll justify our salaries” position. I did…have they replied…no.

    • David Ainsworth

      Hi Richard. £100k is not peanuts. It’s a lot of money. It’s just that running an aid organisation with several thousand staff is a difficult job which deserves a lot of money. Like it or not there is a jobs market. I think it’s a bit of a weird, skewed market which values some of the wrong stuff, but even so, you can’t ignore it completely.

      Take a quick glance at the £60k jobs on the Guardian jobs website: http://jobs.theguardian.com/jobs/-60-000-80-000/. You’ll find it’s middle managers in paper firms in Slough. Or go to the Lawyer website. http://jobs.thelawyer.com/jobs/-60-000-69-999/ There are entry level jobs on there earning £60k.

      Now maybe lawyers get paid too much. Actually, it’s hard to argue otherwise. But I still can’t help thinking the chief exec of Oxfam is worth more than a first jobber at Sue Grabbit and Run.

      • Annie Weatherly-Barton

        Whilst I agree that a CEO should be paid a decent rate I do think that £500k is ridiculous amount of money. People applying for top jobs in Charities should show restraint, especially given that it is sometimes a lot of pensioners who are paying for it.

        • Nick Posford

          Hi Annie – you repeat something about £500k in two of your posts but as far as I am aware, none of the CEOs under discussion are paid more than £150k. That may be just as much of an outrageous sum in your opinion, of course, but it probably is important to keep the debate factual.

          Also, you state that “Unbelievable betrayal and dishonest in that this information has never before been in the public domain!” but CEO pay along with tons of facts about how charities are run and how they spend their money are published every year in annual reports. It’s a bit unfair to criticise things that simply are not true. But then, that is the nature of media frenzies.

          My final point is that if a CEO runs a multinational operation that saves thousands of lives every year and improves society, is it unreasonable for us as a society to give that job some value in the form of pay? Indeed, in the midst of this current debate, I can’t help being bewildered that anyone who donates to or works for a charity is not saying actually, why do we pay such exorbitant sums to company CEOs, to the heads of private sector organisations, but when someone who runs a charity is paid a considerable sum to do good, that is considered unacceptable? Seems as a society we may have our priorities rather skewed?

    • Steven Buckley

      Hi Richard – we have three statements on the website and have engaged proactively with supporters across all channels and were one of the first charities to do so when the news broke.

      I can assure you that each and every response we’ve received has been replied to. I’m not sure why yours hasn’t been received by the team but please send it through again to info@christian-aid.org with a copy to me (sbuckley@christian-aid.org) and we’ll ensure that you get a response to us.

      Asking supporters to write in is to encourage dialogue and shared reflection. It is in no way intended to stifle debate.

      Our current statement to supporters can be found here: http://www.christianaid.org.uk/aboutus/index/ceo-salary-debate.aspx

      Steven Buckley
      Head of Communications
      Christian Aid

      • Annie Weatherly-Barton

        Well I didn’t receive any response to my correspondence from Christian Aid. I did from the two other charities. Here in our rural outback we run Christian Aid weeks where we raise money for your organisation. Of course many of those who do the work are the much despised (in the press & elsewhere) army of pensioners – many of them struggling pensioners. It has been quite a shock to see the kind of money CEOs are earning. Why should pensioners pay for the exorbitant salary of your CEO or any other CEO working in the charity sector?

        From my own point of view I will never, ever give any more to any of the three charities again. I will also be checking out the salary of CEO’s of the charities I do support. Unbelievable betrayal and dishonest in that this information has never before been in the public domain!

        I am astounded by the reaction of the charities involved. Utterly shocked and dismayed.

        • Steven Buckley

          Hi Annie

          I will check with the supporter relations team here and find out whether your correspondence has been received. My sincere apologies if we’ve been tardy in getting a response back to you, but please trust that you will hear from us.

          A couple of quick points in response to your comment here:

          Salaries and other financial information have been in the public domain for many years – you can see a complete listing of annual reports on our website here: http://www.christianaid.org.uk/resources/corporate_reports/annual-reports.aspx

          You can see how this compares to other charity CEOs here:
          http://offlinehbpl.hbpl.co.uk/NewsAttachments/NST/TST_190313_Analysis.pdf

          It’s worth noting too that Loretta’s salary comes from a range of income sources, including government. A very small proportion of any individual donation is spent on executive pay, but we understand that’s cold comfort to someone who has worked, given or collected sacrificially for Christian Aid.

          I want to assure you that this remains a very live issue for us at Christian Aid. While many supporters have written to express their solidarity, there are a number of people who feel that we’ve got it wrong – even though 2012/13 was a record year for our charitable expenditure.

          Do let me know if I can help further .

          Steven Buckley
          Head of Communications
          Christian Aid

        • Steven Buckley

          Annie – see longer response from me but have just checked and we’ve no record of email or written correspondence from you. Drop us a line at info@christian-aid.org and we’ll be sure to respond.

          Best wishes

          Steven

  • Annie Weatherly-Barton

    Couldn’t agree more with David A and Richard T. £100k a year is not “peanuts”. Unbelievable rubbish. If CEO’s want to earn half a million a year then go out and get a job in the private sector. Working for a charity should show some restraint. As Trustees my husband and I work for “peanuts” well not even “peanuts” we work for nothing. Give our time to work very, very hard for our clients. Presumably that is all we are worth? Did someone say “peanuts” and get monkeys? Well I suppose that is what all the legions of people who work for nothing up and down the country are “monkeys!”

    If a CEO is at the end of his already lucrative career how about considering working for less in order to give something back? Or is that beyond the whit of such big organisations? Or is that we have to pay someone £500k to prove that this person is worthy of it? Unlike Trustees who do not take anything at all not even expenses?

    Utter rubbish and those that demand this kind of money should be ashamed of themselves.

  • Annie Weatherly-Barton

    This has just been published in the Independent today. Charity CEOs taking the proverbial?

    http://www.independent.co.uk/life-style/health-and-families/health-news/charity-boss-lobbied-health-secretary-jeremy-hunt-over-nhs-privatisation-documents-show-8762281.html

    Charity boss lobbied Health Secretary, Jeremy Hunt, over NHS privatisation, documents show