Annual Report of the Remuneration Committee 2022-23
A. Introduction
The Remuneration Committee is a formal committee of the University Council.
This report outlines the responsibilities of the Committee, and its key activities and decisions during the year to 31 July 2023 in accordance with guidance provided by the Committee of University Chairs (CUC).
Terms of reference
The Committee reviewed its terms of reference and schedule of meetings during 2022/23. The current Terms of Reference which align with the CUC Guidance are as follows:
- In the light of comparative information on any salaries and other benefits and conditions of service in the sector, and taking into account the University’s interests and the public interest, to review annually and to determine the remuneration of theVice-Chancellor and President and all other members of the University Executive Group.
- To receive appropriate information on additional external income accruing to the Vice-Chancellor and President and other members of the University Executive Group, and to consider the appropriateness of the policy on external income.
- To set the reward framework for senior post holders and to receive a report from the Professorial and Senior Staff Salary Review Committee.
- To note annually any salary increases which take a member of staff’s total remuneration package above £100,000, whether as an explicit retention decision or otherwise.
- To note annually recruitment involving total remuneration packages above £100,000.
- Taking into account both the University’s interests and the public interest, to advise the Council on any proposed severance settlement for the Vice-Chancellor and President; to approve any proposed severance settlements for other members of the University Executive Group; and to note severance settlements for other members of staff whose total remuneration package is over £100,000.
- To review annually the Gender Pay Gap and other available equality, diversity and inclusion analyses and to reflect how any issues might best be addressed in senior appointment and reward processes.
- To report annually to the Council. The annual report will comply with the requirements of the OfS Accounts Direction and the CUC Code and Guidance.
- To review its terms of reference annually.
The annual review of the Terms of Reference is to ensure that they remain appropriate and compliant with relevant legislation, Codes and other current guidelines, and to confirm that the focus of the Committee’s work has addressed these priorities.
Frequency
The Committee meets at least three times each year and arranges additional meetings as appropriate and required.
Membership
The Committee consists of five lay members of Council. For the period of this report the membership was as follows:
- Chair: Helen Grantham
- Chair of Council: Alastair Da Costa
- 3 other Lay nominees of Council: Seb Elsworth, Iain Moffatt, and Ken Sargison.
It is the responsibility of Council to ensure that the membership of the Committee has the necessary skills, experience and support to meet the Committee’s responsibilities. The current membership of the Committee meets this criteria.
The Chair of the Remuneration Committee is appointed by the Council and is an independent member of Council other than the Chair of Council. The Committee can, if it so wishes, call upon external advisers as appropriate. The Vice-Chancellor and President, University Secretary and Registrar and the Director of People & Culture Officer (or nominee) are not members of the Committee, but attend as follows:
The Vice-Chancellor and President only attends for agenda items that relate to their role as line manager of Executive members, and to enable the Committee to ensure full consideration of individual performance and organisational strategy when considering remuneration-related decisions. The Vice-Chancellor and President is not present for any matters that affect their own remuneration.
The University Secretary and Registrar and the Director of People & Culture (or nominee) advise the Committee but are not present for any matters that affect their own remuneration. The Director of People & Culture is not a member of the University Executive.
B. Operating Environment 2022-23
During 2022-23 the Vice Chancellor and President has led the ongoing implementation of the University’s Strategy 2020-2030: Universal Values, Global Change. This includes three over-arching areas of Community, Culture, and Impact; supported by an enabling strategy. The University Strategy is underpinned by a Vision to create a fairer future for all, and agreed institutional Values - Inclusivity, Integrity, Collaboration and Compassion. The scale and pace of change required in delivery of the strategy is significant if its aims are to be achieved.
During the reporting period, the sector and the University has been impacted by challenges in encouraging staff to return to on-campus working, the cost of living crisis and industrial action including a marking and assessment boycott.
C. Principles and Approach to Senior Remuneration
The University recognises the value of the Committee of University Chairs (CUC) Higher Education Senior Staff Remuneration Code and the Remuneration Committee seeks to ensure compliance with the Code through consistent application of a University Executive Group Reward Framework and Principles which is reviewed at least annually by the Remuneration Committee.
The Remuneration Committee has direct responsibility for determining remuneration and reward-related matters for the Vice-Chancellor and President and all other members of the University Executive Group. These are executive positions that report directly to the Chair of Council, the Vice-Chancellor and President or the Provost and Deputy Vice-Chancellor. For the period of this report the Group consisted of the following:
- Professor Simone Buitendijk - Vice-Chancellor and President
- Professor Hai-Sui Yu - Provost and Deputy Vice-Chancellor
- Professor Jeff Grabill - Deputy Vice-Chancellor: Student Education
- Professor Nick Plant - Deputy Vice-Chancellor: Research & Innovation
- Jennifer Sewel - University Secretary and Registrar
- Jane Madeley - Chief Financial Officer
- Dennis Hopper - Interim Chief Operating Officer (to Sept 2022)
- Rachel Brealey - Chief Operating Officer (from September 2022)
- Professor Andrew Thorpe - Executive Dean: Faculty of Arts, Humanities and Cultures
- Professor Karen Birch - Executive Dean: Faculty of Biological Sciences
- Professor Julia Bennell – Executive Dean: Leeds University Business School
- Professor Nora De Leeuw - Executive Dean: Faculty of Engineering & Physical Sciences
- Professor Selina Steed - Executive Dean: Faculty of Environment
- Professor Mark Kearney - Executive Dean: Faculty of Medicine & Health
- Professor Paul Johnson – Executive Dean: Faculty of Social Sciences
In addition, the Committee receives updates on remuneration-related matters affecting other groups of staff at the University to enable it to fulfil its responsibility for ensuring that the organisation’s overall framework for remuneration is proportionate, appropriate, and enables the attraction and retention of talented individuals necessary to ensure the delivery of the University’s strategy and its ambitions.
The University of Leeds is a large and complex institution with around 40,000 students and around 10,000 staff and is among the UK’s largest universities. It has an annual turnover of almost £1bn. The University is a world top 100 university with a global reputation for excellence in teaching and research and requires high-performing, experienced leaders to continue its success and to meet its strategic ambitions. When considering matters of remuneration, the Remuneration Committee is required to balance many factors including the performance of the University, the global recruitment market and rates of compensation, the challenging financial circumstances facing universities, external perceptions of senior pay and internal equity factors.
To assist in delivering this balance, the Remuneration Committee considers data from a wide range of sources, including data from relevant HE-sector salary surveys (for both senior staff and Vice-Chancellors), benchmark data from external executive search and reward consultancies, regional data for comparable positions within relevant NHS and Local Authority organisations and data available on national pay trends.
When reviewing salary levels for both the Vice-Chancellor and President and members of the University Executive Group, the Committee applies the principles outlined in the University Executive Reward Framework and Principles. From August 2023 no members of the Executive remain contractually entitled to the nationally negotiated cost of living award, although in line with the CUC Code, the Committee will consider the nationally negotiated award when undertaking its annual review. Careful consideration is given to any additional awards for exceptional performance using available external benchmark data and the cost of performance awards across the University’s wider population.
Salaries
Salary determination at individual level on appointment and thereafter takes account of:
- The UEG Reward Framework and Principles in place at the time.
- Individual competencies, skills and experience, performance and behaviours: as determined by the role expectations measured against individual personal objectives agreed with the Vice-Chancellor and President or in the case of the Vice-Chancellor and President and the University Secretary and Registrar, determined by the Chair of Council in consultation with members of Council, including members of Remuneration Committee.
- Organisational performance & environment: University performance as determined against key internal and external indicators.
- Relevant market data on pay levels in comparable roles and organisations.
- Affordability: the budget available, in the context of the principles articulated above.
- Retention challenges: either at an individual role level, or across a particular professional or disciplinary field.
Bonuses
The University does not currently operate a bonus scheme for senior post holders however it is reviewing its approach taking account of benchmarking and specialist external advice. In line with the approach taken with the wider university staff population, exceptional performance by a member of the Executive, may result in the payment of a non-consolidated, non-pensionable recognition payment.
Pensions
Senior post holders are eligible to participate in a pension scheme under the same conditions that apply to all University staff. Following a decision by the Remuneration Committee in May 2014, it is not University policy to make payments in lieu of pension contributions. This position was confirmed following reconsideration by the Committee in July 2021 of a UCEA sector survey on pension tax policies, and was reaffirmed in March 2022. The matter is reviewed regularly.
Benefits
The University does not, as a rule, offer additional benefits such as private health cover, or car allowance payments as a standard part of the remuneration offer. During 2022-23 the Committee took steps to bring the reward packages of all members of the Executive into line with this Policy.
Consultancy and External Income
The University has policies on External Income and Consultancy that apply equally to all staff. All senior post holders are required to declare any such income and the Remuneration Committee reviews any payments made and ensures compliance with the related Policy. During 2022-23 the Committee agreed that income received from external sources in relation to non-executive Director positions where these have been approved by the relevant line manager may be retained by the staff member. The policy on external income would be revised to reflect this.
Expenses
There is a published University policy on Expenses for University Executive members.
D. Report on business conducted during 2022-23
During 2022-23, the Remuneration Committee held scheduled meetings in October 2022, and in January, March and July 2023 to carry out its responsibilities. In addition, members of the Remuneration Committee were consulted on any changes in the Executive Team including both leavers and new appointments and their remuneration.
Standing Agenda Items
The Committee addressed the following standing agenda items:
- Reviewed and updated where appropriate, its Terms of Reference taking cognisance of developments in sector guidance (e.g. CUC and UCEA).
- Reviewed and noted the data on recruitment and salary increases involving salaries in excess of £100,000.
- Reviewed and noted any severance payments made to staff earning in excess of £100,000 since July 2022.
- Noted the data on external income accrued by members of UEG during the period 1 July 2022 to 30 June 2023 and reassured itself that any such income complied with the University’s policies on external income and consultancy.
- Reviewed the gender, ethnicity and disability pay gap data and approved their publication. It also endorsed the proposed actions to assist addressing the gaps.
Additional Agenda Items
Executive Objective Setting and Performance review: During 2022/23 the Remuneration Committee reviewed the UEG Objectives-Setting and Performance review assessment process and the University Executive Group Reward Framework and Principles and reinforced its expectation for SMART objectives against which the Committee would receive performance reports to inform its remuneration and reward considerations. It urged the Vice-Chancellor and President to progress the universal adoption across the Executive of the Committee’s approved Objectives Template. It also noted that all members of the Executive were now participating in 360 exercises following a successful pilot.
University Executive Group Reward Framework and Principles: Completion and approval of the guidelines was reaffirmed at the Spring 2023 meeting following independent input from external reward consultants. The Committee would commission and receive a further and more detailed report on pensions and rewards options in the Autumn. This would take account of changes announced in the budget around pension provision and abolition of lifetime allowances.
Severance and Non-Disclosure Agreements (NDA): At each meeting the Committee receives a report on any Severance NDAs entered into by the University, and as a matter of course the Chair of the Committee is consulted on any such agreements.
University Executive and Senior Management Team Changes: The Committee received updates on progress pertaining to new appointments and gave due consideration to the formal terms relating to them.
Remuneration Matters Relating to Senior Post Holders and the Vice-Chancellor and President
In consideration of the annual review of remuneration and reward for Senior post-holders by the Remuneration Committee, institutional performance is relevant to the Committee’s considerations. The Committee was mindful of the progress made by the University on implementation of the University Strategy during the period 2022/23 against the backdrop of the industrial action and Marking and Assessment Boycott.
Performance
In line with usual practice, the Vice-Chancellor and President and the Provost and Deputy Vice-Chancellor reported to the Remuneration Committee on the performance of their respective Executive direct reports. The Chair of Council provided an overview of the Vice-Chancellor and President’s performance and leadership since her appointment and supplemented the report of the Vice-Chancellor and President on the performance of the University Secretary and Registrar in respect of her statutory and regulatory responsibilities as Secretary to the Council.
Vice-Chancellor and President
The Remuneration Committee reviewed the remuneration package of the Vice-Chancellor and President at its meeting in July 2023. It reflected on her leadership and the performance of the University over the year, and considered feedback gathered by the Chair of Council from members of Council.
The Remuneration Committee concluded that the Vice-Chancellor and President had continued to progress implementation of the University Strategy through an ongoing period of challenge for the sector, in particular of industrial action and the marking and assessment boycott, which had impacted on her personally and on strategy delivery progress and pace. Taking into account the benchmark information, the Committee concluded that the Vice-Chancellor’s base salary remained appropriate. As in previous years, it acknowledged that the University was unusual in having all reward incorporated within a core salary. The Committee agreed that the Vice-Chancellor and President core salary should rise in line with the UCEA nationally agreed cost of living pay award for 2023 of 5%, which would also be applied to all other members of the Executive from 1 August 2023.
As required, the University has disclosed full details of the Vice-Chancellor’s remuneration in the Annual Accounts to 31 July 2023.
| Emoluments of the Vice-Chancellor | 2022/23 £000 |
2021/22 £000 |
|---|---|---|
| Salary | 330 | 330 |
| Employer contributions to defined benefit scheme | 0 | 0 |
| Benefits in kind | 0 | 0 |
| Total | 330 | 330 |
External income: The Vice-Chancellor received no external income during the reporting period.
Expenses: The Vice-Chancellor complies with the University’s Expenses Policy, and information relating to her latest expenses claims can be found in the Governance section of the University website.
Pay ratios: The Office for Students requires universities to publish two key ratios to show the relationship of the remuneration of the Vice-Chancellor to that of staff within the institution. The methodology adopted is in line with paragraph 12 of the Office for Students Accounts Direction issued October 2019.
The figures for all staff are as follows:
| Year | Basic salary ratio | Total remuneration ratio |
|---|---|---|
| 2022/23 | 10.8 | 9.6 |
| 2021/22 | 11.3 | 10.0 |
In the interests of transparency, the University provides two further ratios to show the relationship of the remuneration of the Vice-Chancellor and President to that of employees within the university (a calculation that excludes individuals who are engaged on worker and/or agency contracts).
The figures for employees are as follows:
| Year | Basic salary ratio | Total remuneration ratio |
|---|---|---|
| 2022/23 | 8.6 | 7.8 |
| 2021/22 | 9.3 | 7.9 |
Other higher paid staff
In line with the Accounting Standards requirements, the University publishes basic salary of other higher paid staff (calculated on a full-time basis). The data for 2022/23 is prepared in accordance with paragraph 12 of the Office for Students Accounts Direction issued October 2019. The requirements have been updated to include both basic salary and market supplements.
| Basic salary of other higher paid staff calculated on a full-time equivalent basis | 2022-23 number |
2021-22 number |
|---|---|---|
| £100,000 - £104,999 | 40 | 52 |
| £105,000 - £109,999 | 66 | 31 |
| £110,000 - £114,999 | 32 | 51 |
| £115,000 - £119,999 | 54 | 6 |
| £120,000 - £124,999 | 15 | 15 |
| £125,000 - £129,999 | 13 | 7 |
| £130,000 - £134,999 | 12 | 8 |
| £135,000 - £139,999 | 4 | 9 |
| £140,000 - £144,999 | 9 | 3 |
| £145,000 - £149,999 | 6 | 2 |
| £150,000 - £154,999 | 7 | 4 |
| £155,000 - £159,999 | 4 | 3 |
| £160,000 - £164,999 | 2 | 1 |
| £165,000 - £169,999 | 2 | 1 |
| £170,000 - £174,999 | 3 | 4 |
| £175,000 - £179,999 | 0 | 2 |
| £180,000 - £184,999 | 6 | 2 |
| £185,000 - £189,999 | 4 | 2 |
| £190,000 - £194,999 | 1 | 1 |
| £195,000 - £199,999 | 1 | 0 |
| £205,000 - £209,999 | 0 | 1 |
| £215,000 - £219,999 | 1 | 1 |
| £220,000 - £224,999 | 1 | 1 |
| £230,000 - £234,999 | 2 | 0 |
| £330,000 - £335,000 | 1 | 1 |
| Total | 286 | 208 |
Other matters: Vice-Chancellor and President
In September 2023, the Remuneration Committee met to consider the Vice-Chancellor and President’s decision to leave the University at the end of December 2023 and the remuneration impact associated with this. In October 2023 the University Council agreed that, to facilitate an effective transition, the Provost and Deputy Vice-Chancellor Professor Hai-Sui Yu, should adopt the role of Interim Vice-Chancellor and President and Accountable Officer with effect from 1 November 2023 and the Remuneration Committee agreed a suitable interim remuneration package to reflect this. The Council has commenced the process of a global search for the new Vice-Chancellor and President of the University of Leeds.
Chair of Remuneration Committee
November 2023