Inside Housing chief executive salary survey 2015

In another year of pay inflation across the sector, 18 chief executives benefitted from an increase in total pay of more than 10%. But many of the biggest rises are not as dramatic as first appears.

Bruce Moore, chief executive of Housing & Care 21, posted the biggest absolute rise in total pay this year. He took home £224,000 in 2014/15. In other words, 76% more than the £127,000 that the 18,818-home paid former chief executive Pushpa Raguvaran.

The change in personnel at the top of Housing & Care 21 may be skewing this dramatic change. Still, even if you compare Mr Moore’s total salary with Ms Raguvaran’s earnings in 2012/13, of £188,124, the association has reported a steep increase in salary.

BPHA’s 29.8% increase in chief executive pay is also due to a change in staffing, as 2014/15 was the first full year of Kevin Bolt’s tenure as chief executive, taking over from John Cross. The difference in pay could be seen as startling, but it is almost entirely due to the fact that Mr Cross left part way through the 2013/14 year, and therefore was not eligible for a bonus.

A fairer comparison looks at basic annual salary: Mr Cross would have been paid £136,000 if he had worked the whole financial year. Mr Bolt was paid £162,000 – this includes a fee for one month’s consultancy work before he took over.

Highest pay per £m of turnover

In other cases, a pay increase can represent a correction. Linda Adair Whittaker, chief executive of NPT Homes, had a salary increase of over 15%. Last year, she was the lowest paid of the biggest 100 housing associations. In our extended table of 180 chief executives, her pay this year of £120,000, with no bonus or car allowance, continues to place her in the modest position of 147th highest paid chief executive.

Some chief executives saw a decrease in pay. Just like the biggest increases, the biggest decreases are largely down to changing chief executives. Sheila Doran, the outgoing chief executive of Eastland Homes, is one such case, with a reduction of almost 20%.

However, again, this figure is skewed because Ms Doran worked a four-day week in the year before her retirement. She was replaced by Dave Williams, an internal hire who was the association’s director of property services. He was paid £101,186.

Howard Toplis took over Greensquare from David Ashmore with a 14% reduction in total pay. This was because Mr Ashmore received a bonus in 2013/14, but Mr Toplis did not in 2014/15. His basic pay was a touch higher than Mr Ashmore’s.

Bonuses, for those chief executives who earned them, also rose. As Inside Housing reported last week, bonuses for chiefs of the biggest 100 housing associations rose 4.7%, from £16,737 last year, to £17,519 in 2014/15.

Fifty associations paid a bonus. Most were in the biggest 100 associations, but our list revealed performance-related pay is not unheard of in smaller organisations too. Twenty associations outside the biggest 100 paid a bonus.

As in previous years, many housing associations simply do not operate a performance-related pay scheme. A small number had cancelled their scheme since last year. Victory Housing, a new entrant, mentioned it has made this decision. “It was felt a performance bonus structure was no longer appropriate for the organisation as a whole,” a spokesperson says.

In total, housing associations gave out just under £700,000 in bonuses.

Only 45 out of 180 chief executives are women, or 25%. This compares to the 22% of female chief executives in last year’s survey of 100 housing associations.

However, the small increase in the pool of women in the survey was accompanied by a decrease in average salaries.

Notably, female chief executives took home four out of the 10 lowest salaries.

Last year, Sue Manning, director of human resources at Capita, told us of the underrepresentation of women in top jobs: “It’s going to change. I’m confident.”

This was based on the idea that more women are chief executives of smaller associations, and talent was simply waiting to rise up the ranks.

But the low proportion of women in the top 180 suggests this may not happen soon.

Notably, the average pay for a female chief executive continues to trail male chief executives. On average, women with the top job in a housing association were paid just £147,634.

Only 13 women received a bonus, and the average for their performance-related pay was £11,100, well below the average for all chief executives.

Many of these are new entries to the salary survey.

But for those social landlords for which Inside Housing has year-on-year figures, we calculate the average pay increase for a female chief executive was only 3.9%.

It trails by 14% the increase in average salaries of 4.5% for organisations headed up by men where we have two years of figures.

Comparing these figures must be done with caution because on some occasions a female chief executive has replaced a male chief, or vice versa.

This year, 12 chief executives took a cash payment in lieu of part or all of their contribution to their pension scheme.

Some of these payments are generous additions to take-home pay, with Jane Ashcroft, chief executive of Anchor, taking home an additional £60,000, while the association still contributed about £30,000 to her defined contribution pension pot.

Pensions consultants say this is most likely due to chief executives reaching their ‘lifetime allowance’ for the size of their pension pots, after which the tax treatment makes it unfavourable to build up a bigger pension. The point at which tax starts to disincentivise further contributions is when the pot reaches £1.25m this year.

The average pension contribution among those who received one was 13.2%, but the percentages ranged from 31.2% to 1.8%. Alan Collins, director at pensions consultancy Spence & Partners, says: “It doesn’t surprise me there’s a broad range.”

For comparison purposes, across the UK, the average employer contribution to staff pensions was 6.1% in 2013, the last year that figures are available from the Office for National Statistics (ONS).

All but 36 chief executives are on ‘defined benefit’ schemes, in which retirement income is guaranteed.

However, housing associations continued to shift away from the most generous type of pension – a defined benefit plan which guarantees retirees an income based on their final salary. Fifty-four associations are now contributing to a ‘career average’ pension on their chief executive’s behalf, with many switching from defined benefit this year or last year. The ONS says that pension contributions may be rising in order to offset deficits in these schemes.

A small handful of chief executives had no pension contributions at all this year. However, caution is needed in interpreting these 0% contributions. Rod Cahill, for example, chief executive of 21,350-home Catalyst Housing, had no money added to his pension. But the association explained this is because he has exceeded the lifetime allowance pot. His total salary rose 8.0%, at least in part because his basic pay was increased to compensate for a lack of pension contributions.

An unusually large proportion of respondents declined to tell Inside Housing the details of their chief executives’ pension scheme, even though this is information disclosed in their annual accounts.

UPDATE: 11.09.2015

This article originally stated that Derwentside Homes contributed 31.2% to its chief executive Geraldine Kay’s pension. This was incorrect, as 31.2% is the total contribution by Ms Kay and her employer to the pension. The employer’s contribution is in fact 14.4%

21.09.2015

This article originally stated that Michael McDonnell, chief executive of Helm Housing Association had a pay rise of 12.1%. However, Mr McDonnell worked only 10 months of 2013/14 as chief executive of Helm, and therefore this gives the wrong impression. Annualised, his salary remained the same at about £95,000. This was based on an error in comparing actual pay, rather than annualised pay.