Pay and the Charity Sector

From 2007 to 2012 the collective pay of the top five executives in Which? increased from just under £0.6m to just under £1.1m.

In the Accounts for 2013 it was revealed that four of these executives are on a potential bonus of 300% of salary [that is 100% of salary for each of the three years of the Long Term Incentive Plan]. This would mean a collective bonus of £2.54m for the four - on top of salaries ranging from £170,000 to £320,000.

According to Third Sector, a charity sector site, in a report in March 2013 on the 100 largest charities, our CEO is the best paid of all charities in the general sector. The commonest pay rate in the General sector being £155,000 almost precisely half the amount Which? pays its CEO.

My feeling about big bonuses is that I expect senior staff to be working for the benefit of the charity at all times and I fail to see how increasing pay can achieve anything more. It is even more galling when you realise how much better paid the executives are compared to the vast majority of charities that have many times more staff, more income, and more locations. Other Charities

An argument put forward by Which? is that it is a special case  as reiterated in Chairman Paddy Barwise's  letter 11th August sent to a selection of shareholders:

"As I have repeatedly said in our annual report, and at the AGM when discussing issues such as our governance structure as well as our pay policies, Which? is not a normal charity because we do not ask for or accept public donations, government funding or any other fundraising income."

If this is the only reason for paying high salaries and offering huge bonuses to less than a handful of senior staff then it seems quite thin. It also rather skates around the fact that Which Ltd accepts money from companies that wish to use our Best Buy logo. I also believe that Which Ltd receives money from guiding browsers and potential purchasers to online sites - in the online world it is called clickthroughs and pay-per-sale.

Looking for a charity that I consider shares some of the Consumers' Association ethos the National Trust springs to mind. The NT CEO earns around £160,000 a year and has nearly ten times the staff, additional volunteers of 70,000, more subscribers, 300 + houses and 73,000 archeological sites. Somehow you might think it was a far bigger job than a CEO of a business with under 600 staff.

However if we want to compare very like with like we can cross the Channel to the Netherlands where the consumer body pre-dates ours slightly, has 485,000 members, and the Managing Director there earns 150,000 Euro [£120,00], with a few small perks. There is the possibility of a bonus of no more than 20% and that is enshrined in the Consumentenbon documents.

Interestingly like the National Trust they have a large council type structure which in the Consumentenbond case can amount to 75. The Trustees are chosen by these delegates from amongst their members. I would add this is courtesy of Bing translator some subtleties may have been lost.

