As charities are increasingly coming under scrutiny for the pay received by Chief Executives and senior staff, the Charity Commission has released a statement criticising Marie Stopes International regarding the remuneration package received by its CEO.
In August, the Charity Commission asked Marie Stopes to explain why the Chief Executive Simon Cooke had received a salary of £217,250 plus a performance related bonus of the same amount, equalling £434,000. The purpose of the examination into the decision to award the remuneration package was to determine if the trustees had acted in line with their duties and responsibilities. Helen Stephenson, Chief Executive of the Charity Commission, said at the time “We have asked the trustees … to explain how they took into account the potential impact of the chief executive’s pay on public perceptions of the charity, and the charity’s reputation among donors, supporters and beneficiaries… The actions of one charity can impact on the reputation of all charities.”
In December the Commission released a concluding statement following its examination of the decision to reward the remuneration package. The Commission criticised Marie Stopes International, saying the documentation around the decision to award the bonus was “inadequate” and the trustees were unable to provide evidence to demonstrate that they had taken into account all the relevant factors when making the decision. The trustees have been issued with formal advice under s15(2) Charities Act 2011 requiring them to review the factors they take into account when deciding the CEO’s remuneration.
In a further statement, Helen Stephenson said “We are not a regulator or controller of executive pay. But we expect decisions of this nature to be made carefully, mindfully, and in a way that ultimately serves the charity’s beneficiaries into the future and demonstrates their special status as a charity”.
Furthermore, the Charity Commission is currently conducting a study of the salaries of the top paid employees in charities and plans to publish a report this year, which is an indication of the increased interest. The issue of management of conflicts of interest – payments to connected individuals and organisations – is well-established, but how a charity balances competitively remunerating staff to ensure the best personnel and maintain internal and public confidence in its use of funds is a much greyer area.