Charities refuse to reveal chief executives’ pay

Salaries-chiefexecs-web

Statement of Recommended Practice (Sorp) consultation reveals many charities opposed to changing status quo. 

25th March 2014 by Robert Armour 1 Comment

Charities should not be forced to reveal the salaries and job titles of their highest paid staff, according to sector leaders.

The Office of the Scottish Charity Regulator and England’s Charity Commission have conducted a joint consultation asking for views on the new Statement of Recommended Practice (Sorp).

A blanket requirement could lead to relatively modestly paid employees having salaries disclosed - Catriona Cazaly

Sorp, which provides guidance for charities in accounting and reporting, is currently being re-drafted with one of the many recommendations being that charities should disclose exact titles and salaries of their highest earning staff.

Currently organisations only need to disclose the pay of employees earning more than £60,000 a year in £10,000 increments.

Of the 179 responses published so far, however, many are against the idea of making senior staff salaries more transparent, particularly as this is not currently a requirement of private sector organisations.

Jan Savage, head of policy at Enable Scotland, said the move could impact on staff retention and recruitment leaving charities at a distinct disadvantage.

“We do not agree that larger charities should be required to disclose the job title and remuneration of their highest paid employee.

“If this does happen, we would be concerned about the potential impact on recruiting staff at the most senior levels to oversee the operation of a large-scale business as well as our charitable activities, and further, we would be concerned about the impact that this could have on our charitable income, both from individual donors and grant-making bodies.”

Organisations have also argued that disclosing salaries could impact on an organisation’s ability to be flexible about the level of salary it pays future employees in these posts.

Catriona Cazaly of the Free Church of Scotland said any move to reveal salaries would impact on privacy.

“The requirement to disclose the remuneration of the highest paid employee may  be appropriate if the individual is earning over a certain figure eg £60,000,” she said. 

“However, a blanket requirement could lead to relatively modestly paid employees having salaries disclosed.”

The Charity Finance Group said in its submission that the move would be sensitive.

Such disclosures “could alter decision-making by trustees on remuneration and redundancy payments because of the internal sensitivity around such payments in cases, to the detriment of the organisation,” it said.

And Jeanette Wilson of the Scottish Churches Committee said more charities would be singled out for sensationalist treatment by the media should their salaries become widely known.

She added: “The committee would favour the reporting of salaries and staff numbers via income bands which is after all considered sufficient in corporate circles and in the education field.”

The new Sorp guidance should be out later this year.  

Charity sector pay in perspective

Charity pay came into the spotlight last year after it was revealed the number of chief executives earning six-figure sums  at 14 of the UK’s leading aid charities had increased by 60% in three years.

As a result of media attention charity chiefs’ pay was examined with charities finding themselves under fire.

To redress the balance, the Association of Chief Executives of Voluntary Organisations produced research showing the average pay for a charity chief executive is just £60,000 – ranging from an average of £45,401 in Scotland to £70,000 in London. 

This was backed by a study from nfpSynergy in 2013 showing that while charity executives’ salaries had grown on average by 3.6% last year, those of their FTSE 100 counterparts had grown by 14%  and were typically 20 times higher in the first place.

24th March 2014 by Alastair Cameron

This just serves to show that charity leaders are no better than those in other sectors - secretive, self-protective, and just a tad hypocritical. All in favour of open-ness and transparency until it affects them personally. I do not view my comparators as people in the private sector - my comparators are those I work alongside. If we can defend the salaries we pay, why should we be afraid of people knowing them. I'm a Chief Exec of a small charity. I earn about £37,500 pa.