Shrinking pay pots for all?
October 2009
Voluntary sector CEO pay languishes as recession deepens
A recent survey has revealed stark disparity in pay levels at the top of the voluntary and private sectors – as over a quarter of charity chief executive officers (CEOs) have had their pay frozen in the past 12 months.
The ACEVO Annual Pay Survey [1], conducted by Tribal Global Resourcing through a questionnaire, reveals that 28 per cent of charity CEOs have experienced a remuneration freeze during the last year, in response to the deteriorating economy. This contrasts with a 10 per cent average rise in the salaries of the CEOs of the FTSE 100 companies over the same period.
The recession has seen an increased workload for the third sector, but pay has stagnated or even dropped - the pay of smaller charity CEOs fell by an average 9.1 per cent in the last 12 months whilst the demand for charitable services rose by 17 per cent.
The Charity Commission’s recent Charities and the Economic Downturn report [2] showed that 69 per cent of charities had experienced a drop in income from investments, 39 per cent saw a fall in grants income and 26 per cent reported a decrease in fundraising income.
Stephen Bubb, CEO of ACEVO noted a contrasting approach to economic conditions between the private and voluntary sectors. ‘While the CEO’s of the sector left to mop up the affects of recession have taken a responsible path,’ he said, ‘it seems it is they and the organisations they represent that are shouldering much of the financial burden of recession...It is important that we continue to make the case for paying charity chief executives fairly for the demanding and crucial professional role they continue to play.’
Increasing economic hardship for beneficiaries, coupled with falling income levels, means longer hours for executives. The ACEVO survey showed that almost 70 per cent of charity CEOs work an average ten hours overtime at weekends and nine hours during the week; many also don’t take their holiday entitlement.
However job satisfaction levels were buoyant – 90 per cent reported being satisfied in their jobs, 81 per cent were happy in their career and 96 per cent would recommend working in the sector to others.
The sector doesn’t want for dedication, but the pay freeze and cut trend could prove dangerous for its ability to seek out and hold on to senior talent in the long term, according to David Fielding of Tribal Resources.
‘Another very real threat to charities is their failure to attract and recruit diverse Executives, Chairs and Trustees,' he said. ‘Despite some real improvements in gender representation in senior roles, leadership teams still do not adequately reflect the population they seek to represent. Playing lip service to the issue of diversity is simply not good enough.’
The average chief executive salary in the third sector this year is £57,264.
display_open/publications/1726 for further information on how to purchase the survey
Author: Claire Shropshall
Claire Shropshall is the editorial assistant for Charity Funding Report, Caritas, and Codicil magazines. Claire has a BA in English Literature and Philosophy from Birmingham University and a Postgraduate Certificate in Periodical Journalism from London College of Communication. She previously worked in Central America as a voluntary reporter for an English-language newspaper.
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