Tag Archives: chief executive pay

The dangerous charity chief executive pay debate

There has been a lot in the press recently about how much charity chief executives are paid.

This is nothing particularly new. Pretty much annually the media decides to turn its glare onto the wage packets of senior staff, particularly chief executives, in the voluntary sector.

This time round the Telegraph kicked things off with an article entitled: ’30 charity chiefs paid more than £100,000′. Inevitably, the Daily Mail then couldn’t wait to stick its boot in, with the column ‘Hideous hypocrisy of the charity fat cats’. One little gem from said piece was: “It has emerged that for all their noble talk of helping the needy and emotive campaigns against inequality, senior figures in the poverty industry have been quietly pocketing hefty six-figure salaries.”

This dangerous, flippant sentiment angers and perplexes me, and I will briefly explain why here.

First, to get things into a little perspective, a paragraph from this Spear’s blog starts to demonstrate how things generally are back in the real world:

“The CEO of Oxfam is paid £120,000, and is responsible for a £360 million budget, 700 shops in the UK and 5,000 employees and 20,000 volunteers who work in over 90 countries across the world—some of them very risky places to be. £120,000 doesn’t feel like a lot in the context of that job description. The CEO of Next also runs 700 shops (but no humanitarian aid) and gets nearly £1.5m.”

I run a small business myself. Because I set it up I don’t, and never will have, the same salary expectations as a chief executive who does not own the organisation they are running. But I have already been able to start to appreciate just how difficult it is to run an organisation.

There are staff who are reliant on me for their jobs and their wage packets; suppliers, rent, rates, service charges, plumbers, electricians, and multiple other bills need paying every day – and the buck will always stop with me for that. If a customer is ever unhappy with their experience, if the council decides we are breaking a rule, if we get a terrible review in the press, if an accident occurs at the workplace, if the price of wheat increases, if someone calls in sick, if we have a break in and all our equipment and stock is stolen, if the business is flooded, if our VAT is miscalculated, this will ultimately always be my problem to deal with.

Already, I know that if I wanted to hand over all of these stresses and hours and responsibilities to someone else to manage the business for me I would need to pay them significantly for that.

If I then multiplied all of this by many hundreds or even millions and increased its complexity to include overseas work, lobbying government and negotiating with multiple sources of funding, I can only begin to imagine the pressure upon someone who is running a much larger, charitable, organisation. It is not the kind of pressure and level of responsibility that just any random person would be able to handle.

The kind of person who would be willing to take this on and could perform to a high standard would be able to get a very well-paid executive role in any sector.

In an equivalent private sector role it is likely that this person would be paid in the high hundreds of thousands, potentially a seven figure sum, with share options, a bonus, a plush office, and most importantly the knowledge that this pay packet would be likely to grow and grow.

In the charity sector, the Telegraph seems to have a problem with this person being paid £100,000. As a regular donor to more than one multi-million turnover charity, I would personally be quite worried about the calibre of chief executive in place if they were earning much less than that.

By Sophie Hudson

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