Can public sector Executive salary be justified?

Can public sector Executive salary be justified?

Executive Grapevine
Executive Grapevine | Executive Grapevine International Ltd

With public sector workers experiencing a harsh pay cap, it’s become a Government concern to discuss the right level for public sector pay at executive level. Last week, Jo Johnson, the UK universities minister, said university leaders should not earn more than the £150,000 a year, paid to Prime Minister Theresa May.

He suggested universities that could not justify paying their Vice Chancellors more than this would be fined – The Financial Times reports.

With public sector pay witnessing a harsh cap – being frozen for two years in 2010, except for those earning less than £21,000 a year, and since 2013, rises have been capped at 1% - below the rate of inflation – the disparity between the bottom line and bosses has come into question.

The median figure of Vice Chancellor pay, as determined by the annual Grant Thornton was £258,000 - a figure which the Vice Chancellor of Nottingham Trent University received. However, in comparison, according to a 2015 analysis by the Equality Trust, private sector CEOs on average, annual reports pocketed £5.3million a year.

With Government plans to crackdown on fat cat pay, closing the disparity between the top and bottom line, comparing the Prime Minister’s pay, and that of top university bosses, will be met with resentment.

The Financial Times reports that Louise Richardson, Vice-Chancellor at Oxford university, earns a salary of £350,000, and she responded to Johnson’s statement with: “I would suggest the government could more fruitfully concentrate on how we are going to attract EU workers after Brexit, so vital for our health services, than query what I earn.

“Last week, Oxford was named the world’s top university in the Times Higher Education rankings. Perhaps Mr Johnson would care to name another UK institution that is world number one in anything. He made fun of me for pointing out that I did not earn as much as footballers. English footballers last topped the world rankings 51 years ago. Perhaps a more pertinent question would be why I earn only a little over twice as much as the prime minister.”

Edward Byrne, President and Principal, King’s College London, that earns £350,000 also questioned the uncertainty over EU citizens’ status in the UK. “Because of local cutbacks in financial support, the numbers of students applying to study nursing at UK universities has dropped by 19%. In this crisis for UK nursing, King’s College stands as a beacon. I would suggest the government could more fruitfully concentrate on how we are going to attract EU workers after Brexit, so vital for our health services, than query what I earn.”

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