St Andrew's Healthcare chief exec takes 50 per cent pay cut

21 Oct 2013 News

The chief executive of St Andrew’s Healthcare, Professor Philip Sugarman, has taken a pay cut of almost 50 per cent this year, following his 18 per cent rise last year.

The chief executive of St Andrew’s Healthcare, Professor Philip Sugarman, has taken a pay cut of almost 50 per cent this year, following his 18 per cent rise last year.

It was revealed in St Andrew’s Healthcare’s most recent accounts, published last week, that Sugarman received an 18 per cent pay rise for the year 2012/13, taking his package from £552,000 to £653,000.

But the charity has said that a subsequent large pay cut for Sugarman - he is now earning £325,000 - will be reflected in its next set of financial accounts.

Christine Nairne, head of communications at St Andrew’s Healthcare told civilsociety.co.uk: “Philip had both the CEO and medical director roles for many years, and was very successful in this quite unique leadership role, and was appraised accordingly.

“I understand that he suggested the voluntary 50 per cent reduction some years ago, well in advance of relinquishing the second role, but to be implemented broadly around the time of a transitional role change.

"The committee then made its own decision to reduce his salary by a substantial sum (most of the 50 per cent), and this happened and was implemented earlier this year. This will appear in the financial year’s accounts, posted in a year’s time.”

Previously, Professor Sugarman had been medical director, chief executive and clinical practitioner at the charity. Now he only holds the chief executive role.

Press criticism

However, the revelations around Sugarman’s salary package have sparked more criticism in the press of charity executives’ pay.

The Independent on Sunday yesterday suggested that the size of Professor Sugarman’s salary will likely fuel criticism around high pay in the charity world.

But, Jane Appleton, director of communications at St Andrew’s, told The Independent: “St Andrew’s has doubled in size since being overseen by Professor Sugarman as chief executive. We believe that you have to pay a proportionate salary to get the best talent; and, at this current level, we are not out of kilter with the rest of the sector.”

Also speaking to The Independent, Martyn Lewis, chair of NCVO, which has set up an inquiry to investigate pay in the charity sector, said that Professor Sugarman’s salary “certainly raised more than an eyebrow” and “was one of the largest in the charity sector”.

NCVO’s pay panel, which mostly comprises charity chairs, will meet for the first time next month and publish recommendations on deciding pay levels for senior charity executives, next spring.

No small-charity representation

But the reaction from the charity sector to the new group has been mixed. A recent NCVO blog on the pay panel attracted several critical comments.

Commenting on NCVO’s blog, Mark Freeman was concerned that there was not much representation on the inquiry from the smaller end of the charity world. He added: “I expect lumping us all into one group just because we are charities has its issues. The six-figure salaries and the uproar they cause do not exist at the vast majority of organisations.”

No focus on low pay

Catherine Bavage, chief executive of Volunteer Centre Tower Hamlets, said: “I think this inquiry completely missed the point, which is the very low pay that most voluntary sectors typically earn. The problem is exacerbated in London, where costs of living, especially accommodation, are astronomical.

“NCVO sounds pleased with itself that its own ratio of senior executive to lowest-paid staff member is 8:1. What this means is that NCVO’s chief executive is earning at the very least £124,488 to manage a moderately-sized infrastructure organisation. Is its chief executive really worth eight times more than an administrator? Does he work hard? Yes, probably. Does he work eight times harder, or does he have eight times more impact? I very much doubt it.

"Why isn’t NCVO arguing for flatter pay structures and a more even distribution of wages in the voluntary sector? Surely a ratio of 2:1 or 3:1 would be a far better thing in charities with limited funds? It would help reassure donors that their money is being spent prudently and would better reward frontline staff who often work in emotionally demanding jobs.

“And as for those charities and trustees that have chosen to pay their chief executives colossal salaries, let’s not rally round and support them. Instead, let’s allow them to take the flak for a while and see if they can justify their decisions when properly scrutinised. Maybe some of them will have a rethink.”

NCVO 'hypocritical'

David Hoghton-Carter, founder of Minerva Pathway, agreed with Bavage, saying: “I’m really quite surprised and dismayed that NCVO seems so damnably pleased with itself for operating at a 8:1 ratio. I strongly support Catherine Bavage’s comment on this.

“And I’ll add that running a major consultation on executive pay while maintaining quite a high disparity ratio seems very disingenuous, even hypocritical. It calls into question how independent the final output will be. Will you really be willing to suggest significant change even as you pay your senior executives in this way?”

In response, Karl Wilding, director of public policy at NCVO and author of the blog, said the inquiry was not about “justifying the salaries paid to senior staff”. He added:

“There are some strong comments here about my mention of NCVO’s ratio: this was mentioned as a matter of fact, with no comment appended. It’s for the inquiry to judge whether this is appropriate or not.”

Dianne Jeffrey, chair of Age UK, has left the pay inquiry as she has been asked to set up and chair another, unrelated, panel for the government.

NCVO is keen to hear views and evidence as part of the pay inquiry. Anyone interested can get in touch at [email protected].