How Universities Work: Deciding Executive Pay.

My priors / declaration of bias. Those who know me, know I have had my disagreements with the executive of King’s College London, the university at which I did my last three degrees, and to which I am still affiliated.  As a one time student rep and environmental activist, I found the then executive less than consistently helpful (I was not alone).   So I might be biased.

My plan is to write a series of short articles about certain aspects of governance in Universities.  The first is one that always interested me: Executive Pay.  Specifically, who decides what the vice-principal (VP, sometimes called a vice-chancellor) gets paid.  I’m going to focus on KCL, as it’s ‘closest to my heart’.  Details may vary from university to university but my impression is that there are more similarities than differences.

How much do they get paid.  Although the pay of the vice-principal of a UK university is supposed to be public knowledge (and should be found in the university’s annual accounts) it’s often hard to find out what it really is -try searching on the KCL website!  Fortunately the good folks at University and College Union do a good job of making it easier and you can find their report here.  This report is clearly the result of a lot of work and many Freedom of Information requests (FoIs).  FoIs are a vital tool which empower citizens to find out how the power structures around them are working, but these citizen powers are constantly under threat.  Incidentally you might be interested to know KCL spent £250,000 in order to prevent having to make the salaries of its other top earners public.

Ed's on the left (photo credit KCL)
Ed’s on the left (photo credit KCL)

As of 2016, the VP of KCL, Professor Byrne, earned £458,000, up from the £324,000 earned by his predecessor.  Apparently a large amount of this rise was due to included relocation costs.  Extensive relocation costs are apparently something an executive can expect to receive.  How many of you have received a nice relocation package?  I should note I have no particular feelings for or against Professor Byrne, I know nothing about his ideas of policies for KCL.  Here I’m only interested in how these systems work.

Who decides the level of pay and how? This is the most interesting question for me, because it has implications for future trends in executive pay.

Executive pay at a university is generally set by a remuneration committee.  The first details I could find from the KCL remuneration committee were from 2013.  At that time, the remuneration committee consisted of Lord Douro, Dr Angela Dean (previously an international financier with Morgan Stanley) Mr Jamie Ritblat (a very wealthy businessman) and Rory Tapner (the CEO of Coutts, ‘The Queen’s bank’).  You’ll note that in 2003 there were no representatives of KCL staff nor students.

The remuneration committee has changed since then.  Perhaps it’s more representative of the KCL rank and file?  So who do we have now:

Sir Geidt (photo KCL)

Sir Christopher Geidt.  The Private Secretary to Queen Elizabeth II since September 2007.  Alumnus of KCL.  Privy Counsellor

Dr Angela Dean (photo HRF)

Dr Angela Dean. The KCL blurb says: “Dr Dean has spent most of her career in international finance and worked as a Managing Director for Morgan Stanley for over 20 years. She holds a DPhil from Somerville College, Oxford”.

Mr D'Souza.
Mr D’Souza (photo KCL)

Mr Michael D’Souza.  The KCL blurb says: “Mr D’Souza is an independent Senior Advisor at the Bank of England’s Prudential Regulatory Authority. His key focus includes corporate governance, risk management & culture and firm-wide recovery & resolution. Mr D’Souza was previously Managing Director & Chief Risk Officer for the international CFO division and the Chief Recovery & Resolution Planning Officer for Bank of America Merrill Lynch….”

Mr Goswell (photo KCL)
Mr Goswell (photo KCL)

Mr Paul Goswell. The KCL blurb says: Paul is the Managing Director of Delancey, a real estate business with a long track record of investing in, developing and managing commercial and residential properties in London and the rest of the UK.
Note: Delancy was founded by Jamie Ritblat’s (previous committee member) father.

And finally.  In attendance at the meetings, the VP.

So what do you note about these appointments?  Two things really strike me: Firstly, apart from the VP, there is no representation from KCL staff or students.  None.  Secondly, the members of the committee do not represent the reality of the world inhabited by normal KCL staff and students.  They are all very much a part of the current ‘British Elite’.

The committee members come from a world in which it’s important to defend the principle of ever higher pay, even if the evidence of even a correlation with performance fails to impress.   What’s more, when many are worried about the commodification and privatisation of our universities, and fed up with the proliferation of unstable contracts for staff, (here and here for example) these are not necessarily the people to fight our corner.  I don’t object to having a respected member of the business community on the committee.  But every member?

When even the current government is making noises about executive pay restraint, when high powered, highly paid executives were the ones responsible for 2008 financial crash, from which normal people are still suffering, can this be right?  Teresa May, the British Prime Minister, made representative boards a promise of her leadership campaign (although that’s now been diluted) – yet right now, we don’t even have representation on a university pay committee?

Ok but at least KCL is open and transparent so we can find out what the rationale is behind the  remuneration committees thinking?  No.  According to the University College Union report on VP pay, KCL does not publish the minutes of the committee, nor does it surrender them to FoI requests.  We don’t get to know.

Until I wrote this, I did not know anything about the makeup or procedures of KCL’s remuneration committee.  I simply felt, like many staff and students, that our interests and indeed our values are not represented higher up. What I have found has done nothing to shake this feeling.

But Fergus, there is some representation of staff and students, the VP himself comes to the committee?  Surely his job is to represent us?

I’ll answer this by way of an anecdote about how information flows in universities.

When I was chair of the Institute of Psychiatry (IoP, now IoPPN) Student Forum, part of my agenda was to push for the IoP and KCL to take its sustainability commitments seriously.  At the time, the IoP did not even recycle (but we were successful in helping to change this – or at least, it changed!), let alone do anything to reduce its energy waste.  I’d liaised with various members of the KCL estates department who were keen to improve things, but who were frustrated that nobody was listening.  They agreed that extra pressure from below would be welcome.  Following a discussion with the forum and various staff I was advised to speak to the then Dean of the IoP, who kindly agreed to meet me.  I asked him if he might help me get our message to the VP, as he might listen to the Dean of the IoP more than to the Student Forum.  What do you think he told me?

“My job is not to petition my boss.”

This felt a little like a punch in the stomach, so winded, I made my excuses and left his office.  When I relaxed, I realised what he was telling me:  Information flows from the executive downwards, not the other way.  Given such a system, how can we possibly expect the interests of students and staff to be represented?  The system simply does not allow it.

(A final disclaimer.  I’m no expert in how universities work.  I’m giving the view from the bottom, as a student, student rep and post doc).  On the other hand, I’ve sat on many committees and talked with many people, so although I’ve been looking from the bottom, I’ve had a pair of binoculars and a stethoscope).

2 thoughts on “How Universities Work: Deciding Executive Pay.”

  1. Having been involved in senior management of a University and become so jaded in how it works I moved to a country that has free education as a reaction to what I saw. It’s worse than you think.

    1. Jon. Thanks for the comment. Perhaps you could write up your experiences for others to learn about? What happens up there in those elevated positions, few are privy to.

Leave a Reply

Your email address will not be published. Required fields are marked *