Record £1.3 million severance pay for English sector leaders

English higher education providers paid out £1.3 million in severance payments to departing heads of institution last year, according to official figures.

Higher Education Statistics Agency (Hesa) data show that providers in England paid a total of £145.2 million in severance payments in 2022-23 – up 36 per cent on 2021-22 and the most since 2019-20, when £188.9 million was disbursed.

Of last year’s total, £1.3 million went to vice-chancellors and principals across 11 institutions, up from just £134,000 in 2021-22. It was also more than double the average across the rest of the time series to 2016-17, of £583,000.

The largest payout went to Craig Mahoney, who – as reported previously by Times Higher Education – received compensation for loss of office of £340,000 at the end of a stint as vice-chancellor of the private University of Law that lasted just five and a half months. The institution attributed Professor Mahoney’s departure to a “reassessment of his priorities”.

Another private provider, Escape Studios – formerly Pearson College London – recorded the second-highest severance payment of last year, with £301,000 going to former principal Roxanne Stockwell.

Collins Ntim, professor of accounting at the University of Southampton, said these payments may reflect less robust governance arrangements in the private sector. But in general, the co-author of a recent study on vice-chancellor remuneration said the golden goodbyes “reflect the crisis in the sector generally”, with institutions “looking for ways to survive”.

The Hesa data reveal that the University of Gloucestershire made a £116,000 severance payment to Stephen Marston, having said that he would retire from the institution at the end of the academic year.

Other hefty payouts for vice-chancellors included £118,000 on the retirement of Peter Neil from Bishop Grosseteste University and £106,000 for David Richardson on his sudden departure from the University of East Anglia.

In 2020-21, there were eight top-level severance payments, but every other year in the data had no more than three. THE reported previously that Dame Louise Richardson received £423,407 in lieu of an entitlement to take a sabbatical when she left the University of Oxford, but this was not classed as a severance payment and so is not included in the Hesa figures.

Lucy Haire, director of partnerships at the Higher Education Policy Institute (Hepi) and author of a report on vice-chancellors’ pay, said governing bodies have plenty of guidance and advice on setting the pay and conditions of vice-chancellors, including severance arrangements.

“While a leap in the number of such payments is a cause for concern, especially if numbers continue to rise, it could also be indicative of governing bodies working well, holding leaders to account in challenging times,” she said.

But with universities paying out well over £100 million in severance payments every year, Jo Grady, general secretary of the University and College Union, said “something in the sector has gone seriously wrong”.

“Attempting to hoover up students and then making swingeing cuts whenever there is a slight fall in recruitment, instead of planning for the long term or investing in staff, is symptomatic of a sector shackled to a failed market system,” she said.

“Likewise, six-figure exit payouts to vice-chancellors, who are often being paid to go because they have failed, are indefensible. The sector desperately needs sustainable funding, long-term planning and an end to bosses being rewarded for failure.”

The remaining severance payouts for 2022-23 include London Film School Limited (£86,000), the University College of Osteopathy (£76,000), Rose Bruford College of Theatre and Performance (£70,000), Arts Educational Schools (£30,000), Paris Dauphine International (£16,000), and Newbold College (£13,000).

patrick.jack@timeshighereducation.com