Annual Report of the Remuneration Committee 2021-22

Source: https://www.leeds.ac.uk/about/doc/annual-report-remuneration-committee-2021-22 Parent: https://www.leeds.ac.uk/structure-governance/doc/reports-accounts-policies

A. Introduction

The Remuneration Committee is a formal committee of the University Council.

This report outlines the responsibilities of the Committee, and its key activities and decisions during the year to 31 July 2022, in accordance with guidance provided by the Committee of University Chairs (CUC).

Remuneration Committee terms of reference

The Committee reviewed its terms of reference and schedule of meetings during 2021; Council was asked to approve updates to the terms of reference, which are as follows:

• In the light of comparative information on salaries and other benefits and conditions of service in the sector, and taking into account the University’s interests and the public interest, to review annually and to determine the remuneration of the Vice-Chancellor and all other members of the University Executive Group.
• To receive appropriate information on additional external income accruing to the Vice-Chancellor and other members of the University Executive Group, and to consider the appropriateness of the policy on external income.
• To set the reward framework for senior post holders and to receive a report from the Professorial and Senior Staff Salary Review Committee.
• To note annually any salary increases which take a member of staff’s total remuneration package above £100,000, whether as an explicit retention decision or otherwise.
• To note annually recruitment involving total remuneration packages above £100,000.
• Taking into account both the University’s interests and the public interest, to advise the Council on any proposed severance settlement for the Vice-Chancellor; to approve any proposed severance settlements for other members of the University Executive Group; and to note severance settlements for other members of staff whose total remuneration package is over £100,000.
• To review annually the Gender Pay Gap and other available equality, diversity & inclusion analyses and to reflect how any issues might best be addressed in senior appointment and reward processes.
• To report annually to the Council. The annual report will comply with the requirements of the OfS Accounts Direction and the CUC Code and Guidance.
• To review its terms of reference annually.

The annual review of the Terms of Reference is to ensure that they remain appropriate and compliant with relevant legislation and guidelines, and that the focus of the Committee’s work has addressed these priorities.

Frequency

The Committee meets at least three times each year and arranges additional meetings as appropriate and required.

Membership

The Committee consists of five lay members of Council. For the period of this report the membership was as follows:

• Chair: Liz Barber (to March 2022) Helen Grantham (from June 2022)
• Pro-Chancellor: David Gray
• Lay nominees of Council: Helen Grantham, Ed Anderson (then Seb Ellsworth), Iain Moffatt

It is the responsibility of Council to ensure that the membership of the Committee has the necessary skills, experience and support to meet the Committee’s responsibilities.

The Chair of the Remuneration Committee is appointed by the Council and is an independent member of Council other than the Chair of Council. The Committee can, if it so wishes, call upon external advisers as appropriate. The Vice-Chancellor, University Secretary and the Chief People & Culture Officer (or nominee) are not members of the Committee, but will attend as follows:

The Vice-Chancellor will attend for agenda items that relate to their role as line manager of Executive members, to enable the Committee to ensure full consideration of individual performance and organisational strategy when considering remuneration- related decisions. The Vice-Chancellor is not present for any matters that affect their own remuneration.

The University Secretary and the Chief People & Culture Officer (or nominee) will advise the Committee but are not present for any matters that affect their own remuneration.

B. Operating Environment 2021-22

During 2021-21 the Vice Chancellor has led the move to implementation of the ambitious University strategy 2020-2030: Universal Values, Global Change. This includes three over-arching areas of Community, Culture, and Impact, which is supported by an enabling strategy underpinned by a vision to create a fairer future for all, Institutional Values - Inclusivity, Integrity, Collaboration and Compassion - and an institutional approach to Equality, Diversity & Inclusion (EDI).

The scale and pace of change required in delivery of the strategy is significant, commencing at a time of challenge across the sector, UK and globally.

The on-going effect as the world emerges from the COVID-19 pandemic has continued to impact and influence the University during this reporting period.

C. Principles and Approach to Senior Remuneration

The University of Leeds recognises the value of the CUC’s Higher Education Senior Staff Remuneration Code and the Remuneration Committee seeks to ensure compliance with this Code through consistent application of the University Executive Group Reward Framework and Principles, which are reviewed at least annually by the Remuneration Committee.

The Remuneration Committee has direct responsibility for determining remuneration-related matters for the Vice-Chancellor and all other members of the University Executive Group. These are executive posts that report directly to the Vice-Chancellor or the Deputy Vice-Chancellor, and for the period of this report consisted of the following individuals:

• Professor Simone Buitendijk - Vice-Chancellor Roger Gair - University Secretary (to 31 December 2021)
• Jennifer Sewel - University Secretary (from 1 January 2022)
• Dennis Hopper - Interim Chief Operating Officer Jane Madeley - Chief Financial Officer
• Professor Hai Sui Yu - Principal Deputy Vice-Chancellor (from 1 September 2021; previously Deputy Vice-Chancellor: International)
• Professor Jeff Grabill - Deputy Vice-Chancellor: Student Education
• Professor Neil Morris - Deputy Vice-Chancellor: Digital Transformation (to 31 October 2021; no new post on Exec)
• Professor Nick Plant - Deputy Vice-Chancellor: Research & Innovation
• Professor Julia Bennell - Exec Dean: Leeds University Business School
• Professor Karen Birch - Exec Dean: Faculty of Biological Sciences
• Professor Nora De Leeuw - Exec Dean: Faculty of Engineering & Physical Sciences
• Professor Andrew Dougill - Exec Dean: Faculty of Environment (to 31 December 2021)
• Professor Paul Johnson - Exec Dean: Faculty of Social Sciences (from 1 January 2022)
• Professor Mark Kearney - Exec Dean: Faculty of Medicine & Health (was Interim Exec Dean to 28 June 2022)
• Professor Alastair Mullis - Interim Exec Dean: Faculty of Social Sciences (to 31 December 2021)
• Professor Selina Steed - Exec Dean: Faculty of Environment (from 1 January 2022) Professor Andrew Thorpe - Exec Dean: Faculty of Arts Humanities and Cultures

In addition, the Committee receives updates on remuneration-related matters affecting other groups of staff at the University of Leeds in order to enable it to fulfil its responsibility for ensuring that the organisation’s overall framework for remuneration is proportionate, appropriate, and enables the attraction and retention of talented individuals necessary to ensure the university meets its strategic ambition.

The University of Leeds is a large, complex, and high-profile institution requiring high- performing, experienced leaders to continue its success and meet its strategic ambitions. When considering matters of remuneration, the Remuneration Committee is required to balance many factors including market rates of compensation, the challenging financial circumstances facing universities, external perceptions of senior pay, and internal equity factors.

To assist in delivering this balance, the Remuneration Committee considers data from a wide range of sources, including, but not limited to, data from relevant HE-sector salary surveys (for both senior staff and Vice-Chancellors), benchmark data from external reward consultancies, regional data for comparable positions within relevant NHS and Local Authority organisations, and data available on national pay trends.

Salaries

When reviewing salary levels for both the Vice-Chancellor and University Executive Group, the Committee applies the principles outlined in the UEG Reward Framework Principles document. Except where individual contractual terms apply, the nationally negotiated pay award does not apply to the University Executive, although the Committee will consider the nationally negotiated cost of living award when undertaking its annual review. Careful consideration is given to any additional awards for exceptional performance using available external benchmark data and the average percentage cost of performance awards across the University’s wider population.

Salary determination at individual level takes account of:

• The UEG Reward Framework and Principles in place at the time.
• Individual performance, competences, and behaviours: as determined by the role expectations measured against individual personal objectives agreed with the Vice-Chancellor or in the case of the Vice-Chancellor and University Secretary, as determined by the Chair of Council in consultation with members of Council, including members of Remuneration Committee.
• Organisational performance & environment: University performance as determined against key internal and external indicators.
• Relevant market data on pay levels in comparable roles and organisations.
• Affordability: the budget available, in the context of the principles articulated above.
• Retention challenges: either at an individual role level, or across a particular professional or disciplinary field.

Bonuses

The University does not formally operate a bonus scheme for senior post holders. In line with the approach taken with the wider university staff population, exceptional performance may result in the payment of a non-consolidated, non-pensionable recognition payment.

Pension

Senior post holders are eligible to participate in a pension scheme under the same conditions that apply to all University staff. Following a policy decision taken by the Remuneration Committee in May 2014, it is not University policy to make cash payments in lieu of pension contributions. This position was confirmed following reconsideration by the Committee at its July 2021 meeting in the light of a UCEA sector survey on pension tax policies and again in March 2022. The matter is reviewed regularly.

Benefits

The University does not as a rule offer additional benefits such as private health cover, or car allowance payments as a standard part of the remuneration offer. Such benefits are occasionally considered on an individual case basis at the time of appointment and are only agreed if it is deemed necessary.

Consultancy and External Income

The University operates a Consultancy Policy that applies equally to all staff. All senior post holders are obliged to declare any such income. The Remuneration Committee reviews any payments made and ensures compliance with the Consultancy Policy.

Expenses

There is a published University policy on Expenses for University Executive members.

D. Report on 2020-21

During 2021-22, the Remuneration Committee held scheduled meetings in November 2021, March 2022, June 2022, and July 2022 in order to carry out its responsibilities. In addition, members of the Remuneration Committee were consulted as appropriate on any changes in the Executive Team including both leavers and new appointments.

Standing Agenda Items

The Committee addressed the following standing agenda items:

• Reviewed and updated the Terms of Reference.
• Reviewed and noted the data on recruitment and salary increases involving salaries in excess of £100,000.
• Reviewed and noted any severance payments made to staff earning in excess of £100,000 since July 2021.
• Noted the data on external income accrued by members of UEG during the period 1 July 2021 to 30 June 2022 and reassured itself that any such income complied with the University’s Policy on External Income.
• The Committee reviewed the Gender Pay Gap figures and noted that a full report would not be prepared for this reporting period.

New Agenda Items

The Remuneration Committee reviewed the UEG Objective Setting and Performance review process and approved a new objectives-setting template to strengthen this. It also received a report on a 360 pilot.

University Executive Group Reward Framework and Principles. Completion and approval of the guidelines were confirmed at the Autumn 2021 meeting following development with independent input from external reward consultants Korn Ferry Hay. They are undergoing ongoing further review/refinement in Spring 2023.

Non-Disclosure Agreements. The Committee agreed that at each meeting it should receive an update on any NDAs entered in to by the University, and that as a matter of course the Chair of the Committee should be advised of any such agreements at the point of action.

University Executive Team Changes. The Committee received updates on progress as pertaining to new appointments and gave due consideration to the formal terms relating to them.

Remuneration Matters Relating to Senior Post Holders and Vice-Chancellor

Given the seniority of the individuals within the coverage of the Remuneration Committee, overall institutional performance is particularly relevant to the consideration of reward. The Remuneration Committee was mindful of the progress made by the University during the period 2021/22 under the backdrop of the impact of the pandemic and implementation of the University 10-Year Strategy.

Performance

In line with usual practice the Vice-Chancellor updated the Remuneration Committee on the performance of each member of the UEG. In addition, the Chair of Council provided an overview of the Vice-Chancellor’s performance and leadership since her appointment.

Vice-Chancellor

The Remuneration Committee assessed the remuneration package of the Vice-Chancellor at its meeting in July 2022. The Remuneration Committee reflected on the Vice-Chancellor’s performance since taking up post in September 2020 and in the past year, and considered feedback gathered by the Chair of Council from members of Council. The Remuneration Committee concluded that the Vice-Chancellor was performing at an extremely high level during a period of significant challenge for the HE sector. Taking into account the benchmark information, the Remuneration Committee agreed that the Vice-Chancellor’s base salary remained appropriate. No increase was therefore applied. In doing so it noted that the university was unusual in having all reward incorporated in a core salary.

As required, the University has disclosed full details of the Vice-Chancellor’s remuneration in the Annual Accounts.

The 2020/21 data covers one month when Sir Alan Langlands was in post, and eleven months with the current Vice-Chancellor, Simone Buitendijk, in office with effect from 1 September 2020:

External income: The Vice-Chancellor has received no external income during her tenure to date.

Expenses: The Vice-Chancellor complies with the University’s Expenses Policy, and information relating to her latest expenses claims can be found in the Governance section of the University website.

Pay ratios: The Office for Students requires universities to publish two key ratios to show the relationship of the remuneration of the Vice-Chancellor to that of staff within the institution. The methodology adopted is in line with paragraph 12 of the Office of Students Accounts Direction issued October 2019.

The figures for all staff are as follows:

In the interests of transparency, the University provides two further ratios to show the relationship of the remuneration of the Vice-Chancellor to that of employees within the university (a calculation that excludes individuals who are engaged on worker and/or agency contracts).

The figures for employees are as follows:

Other higher paid staff

In line with the Accounting Standards requirements, the University publishes basic salary of other higher paid staff (calculated on a full-time basis). The data for 2021/22 is prepared in accordance with paragraph 12 of the Office for Students Accounts Direction issued October 2019.The requirements have been updated to include both basic salary and market supplements.

January 2023