Do we still need to talk about vice-chancellors’ pay?

With Russell Group universities paying their vice-chancellors almost £356,000 in pay, pensions and benefits on average last year, cries of “academic fat cats” are inevitable.

That is 6 per cent more than the monies paid out to vice-chancellors in 2013-14, according to our analysis of the 22 of the group’s 24 members who have published their accounts.

Read more on the latest Russell Group pay rises

That rise hardly suggests that remuneration committees have heeded ministerial warnings about the “substantial upward drift” of leaders’ pay outlined in the 2014 grant letter.

Five universities within the Russell Group paid their vice-chancellors more than £400,000 in total, with the University of Oxford’s head Andrew Hamilton receiving £462,000 in his final full year in post, our analysis shows.

While many will gasp at such gigantic pay packages on offer at universities, it is worth noting that the actual pay increases at most Russell Group institutions have been relatively modest.

Many university leaders saw their overall remuneration rise less than the 2 per cent rise awarded to rank-and-file staff in 2014-15, while some saw pay fall slightly.

Very few vice-chancellors in post in 2013-14 enjoyed a hefty rise as seen in previous years, with the highest straight pay rises standing at 7 and 8 per cent respectively.

What explains this relative restraint at many of  the UK’s most selective universities?

With average pay approaching £400,000, maybe v-c pay has plateaued after years of above-inflation increases? Did remuneration panels pause big pay rises as they awaited their institution’s results in the research excellence framework? Has political and public pressure started to have an effect?

Of course, there were rises in the cost of office at some institutions, but this was largely down to leadership churn.

Queen’s University Belfast and the University of York saw costs increase last year, but mostly because the salary of a new vice-chancellor was higher that those paid to interim heads holding the fort the year before.

At Imperial College London, Alice Gast’s £430,000 pay package was higher than the £389,000 paid to her predecessor a year earlier. That’s a substantial increase, but Gast’s pay at Lehigh University in the US (almost £680,000) was almost 50 per cent higher. She also defused much of the criticism of her pay early on by declaring it before she took office last year.

Another big rise in the cost of office took place at King’s College London, whose financial statements were published just after our analysis was completed. King’s principal Ed Byrne was paid a salary of £350,000 in his first year in office, £80,000 higher than his predecessor Sir Rick Trainor in his final year. Once benefits-in-kind, £45,000 in relocation costs and £56,000 in employer pension payments are included, his total remuneration package was £458,000.

Like Gast, Byrne’s pay as vice-chancellor of Monash University, in Australia, was likely to be substantially higher, having exceeded AU$1 million in previous years.

Nonetheless, that sum pushed average remuneration paid to Russell Group heads past £360,000, with just one institution yet to declare their accounts.

You could argue that the average is actually even higher. Many vice-chancellors are provided with grace-and-favour homes as part of their remuneration deal, although the value assigned to these benefits-in-kind in annual accounts seems rather low (generally below £20,000 a year, often less than £5,000 a year).

Of course, the unusual transition arrangements at Durham University have also had a major impact on this year’s Russell Group average, with Chris Higgins seemingly paid a vice-chancellor’s wage, plus bonuses, while an interim head took the reins of office.

The massively increased costs of office at Durham helps to explain most of the 6 per cent increase last year across the Russell Group overall – a figure that increases to 7.5 per cent when remuneration at King’s is included.

However, average pay still stood at almost £350,000 when Durham’s sums are excluded, suggesting that critics of v-c pay are likely to be out once again in 2016.

jack.grove@tesglobal.com