There was a big hoo-hah in 2016 when the CEO of the Scottish Society for the Prevention of Cruelty to Animals (SSPCA) faced a backlash from the public over his ‘huge’ salary. Taking home more than £200,000 prompted people to ask exactly what Stuart Earley did for this remuneration.
A ripple effect saw the CEOs of many other larger, national charities defend their salaries. In 2019, it was revealed that the Chief Executive of Marie Stopes International, Simon Cooke, earned over £434,000 by the time bonuses were added to his already sizeable annual wage.
Though the furore has now calmed down, was the question ever answered satisfactorily? Are the CEOs of large charities worth their money?
Of course these amounts appear eye-watering to most of us, when the average wage in the UK is just over £30,000. The Prime Minister doesn’t even earn as much as these charity bosses, his wage being approximately £160,000, made up of his PM entitlement (£79,469) and his remuneration for being a member of parliament (£81,932).
Having worked in the industry for many years, I can see the argument from both sides. Generally, salaries for frontline charity workers can be lower than in the public and private sectors for the same kind of work. People don’t tend to work in the third sector for the money.
The responsibilities that rest on charity CEOs’ shoulders, when you consider some of the good causes out there, could be a matter of life and death is something was to go wrong. If a business fails, the staff are made redundant, creditors have to apply to the government for a share of its assets, the owner may even have debt to pay for years to come—but that’s about the worst of it. If a charity fails, domestic abuse victims would have to return to their abusers, cancer sufferers may not receive life-saving treatment, troubled children would be left to fend for themselves on the street—and a hundred other terrible outcomes. Over the last few decades, public services have been cut and cut and cut, due to a lack of funds in the public purse. Charities, over the years, have stepped in to protect the vulnerable and to support the needy. If these charities didn’t exist, people could genuinely die.
The CEOs of national charities don’t just have the management of their staff and the continuation of their services to worry about, they also have to ensure damn good money management and due diligence. Relying on people’s generosity is incredibly hard. Donors don’t receive a product for their money, like in any other business/retail transaction. They’re also unlikely to be the people who will benefit from the service the charity offers, yet they’re the ones tasked with propping up the organisation. Getting this message across and creating buy-in from donors is a huge, huge challenge—particularly at the moment, with the economy in such a precarious position and so many people out of work. There’s only one person who would get the blame and be subject to an inquiry if a charitable organisation had to close: the CEO. They can’t blame their staff for an error or blame market forces. The whole debacle would fall at their feet, and their feet only. Would you want that job?
In the case of Marie Stopes, their answer to questions around Cooke’s salary stated the fact that the organisation manages more than £290 million on an annual basis. This figure puts his remuneration into perspective. It’s also worth remembering that these people are hired (and fired) on their track records. If Marie Stopes hadn’t employed Cooke, he would have just taken his knowledge and experience elsewhere, to another charity.
If his skills and management took Marie Stopes from managing £200 million to the figure already mentioned, his wage, many would agree, would be justifiable and in line with expectations. And that’s key here…we must look at these CEO salaries in context, comparing them with their equivalent roles in the public and private sectors, and by putting a value on where they’d be expected to take the charity that’s hiring them.
These bigwigs’ salaries are commonly decided by the management/trustee board of the charity in question, who take into account the going rates of someone tasked with moving the organisation further forward from where they are at that point.
That’s one side of the coin, anyway. The other concerns what charities pay their frontline staff, in comparison to the person at the very top of the tree. Again, when pitched against similar roles in the public and private sectors, frontline charity workers are often underpaid. However, they also, ultimately, help the charity move further forward, which is the same argument large organisations trot out to defend the renumeration of their CEOs.
There’s another factor at play in this argument. Public perception. When the furore arose, there were many who said they would never donate to organisations that paid their CEOs what they deemed to be ‘obscene’ salaries. I’ve, very briefly, tried to shed a little light here on such renumeration decisions. How many people actually do this, or do they just see the numbers and react? How can a large charity attract top talent to help it navigate the waters ahead whilst also appeasing the public?
The simple answer is, they can’t. There will be people who believe such salaries are an abomination and others who realise that market value, a candidate’s prior success and the sheer weight of responsibility involved are mostly responsible for what a CEO is paid. It’s difficult to change the minds of those in the former category; much better to spend the time enriching relationships with those who can see the whole picture.