CEO earnings snapshot: seven bosses accept pay cut and three have pay frozen
The largest housing associations in England have awarded their chief executives a below-inflation average pay rise of 0.8%.
Exclusive Housing Today research of financial statement data gives the first glimpse of executive pay trends among the largest housing associations in 2020/21 following last week’s deadline to file accounts to the regulator.
Our snapshot research reveals total chief executive pay packages, including pension contributions and discretionary allowances, totalled £7.82m for the largest 25 providers in England, an increase of £60,751 on the previous year (see full table below).
In a sign of pay restraint, seven housing associations; Orbit, Platform, Metropolitan Thames Valley, Stonewater, Optivo, Places for People and Peabody, reduced the total packages for their chief executives. A further three, Guinness, Home Group and Thirteen opted to freeze pay.
The figures would seem to undermine former housing secretary Robert Jenrick’s comments a few weeks ago that housing association executive pay was “out of control”. The increase of 0.8% compares with inflation of 1.7% and 1.5% in February and March 2020 when final decisions on pay for the year were made.
|Rank by stock size||HA name||Turnover 2020/21||CEO total earnings 2020/21||CEO total earnings 2019/20||Annual difference||% annual difference||Total exec team pay 2020/21||Total exec team pay 2019/20||Annual difference||% annual difference||CEO basic pay 2020/21||CEO basic pay 2019/20||Annual difference||% annual difference||Board pay 2020/21||Board pay 2019/20||Annual difference||% annual difference||Staff costs||Staff costs||Annual difference||% annual difference|
|4||Places for People||816,500,000||519,000||525,000||-6,000||-1.1||1,924,000||1,950,000||-26,000||-1||394,000.0||391,790.0||0.0||0||399,000||300,000||99,000||33.0||209,600,000||227,000,000||-17,400,000||-8|
|9||Notting Hill Genesis||909,100,000||312,000||305,000||7,000||2.3||1,999,000||1,837,000||162,000||9||282,000.0||275,000.0||7,000.0||2.5||209,000||196,000||13,000||6.6||83,200,000||83,900,000||-700,000||-1|
|11||Metropolitan Thames Valley||445,767,000||302,736||328,600||-25,864||-7.9||1,626,417||1,775,940||-149,523||-8||302,736.0||328,600.0||-25,864.0||-7.9||166,798||150,303||16,495||11.0||80,771,000||75,957,000||4,814,000||6|
See notes below for information about methodology
Sector experts told Housing Today a combination of the pandemic and its effect on tenants, pressure from government and the regulator to exercise restraint, along with greater costs around building safety and decarbonisation, all played a role in decisions to keep a lid on pay and bonuses this year.
Orbit reported the biggest pay drop, with chief executive Mark Hoyland’s total package 14.8% down on last year. Orbit’s accounts said the board took the decision not to pay an incentive scheme “as a precautionary measure” due to the pandemic.
Metropolitan Thames Valley (MTV) reduced its overall CEO package from £328,600 to £302,736, equating to a 7.9% cut for chief executive Geeta Nanda. “During a year of pandemic, we felt it important we prioritise front line services”, a spokesperson for MTV said.
Guinness said that it had decided to freeze chief executive Catriona Simons pay at £301,000 “in the context of the pandemic”.
|Organisation||Total annual CEO pay % change||Chief executive||Total pay 2020/21|
|Met TVH||-7.9||Geeta Nanda||302,736|
Other reasons were also cited for drops. Platform’s 10.1% cut in chief executive pay, from £337,000 to £303,000 followed a change to link executive pay awards to performance and to ensure they “relate to long term sustainability of financial performance”, chief executive Elizabeth Froude said.
Optivo meanwhile said its 6.1% cut to Paul Hackett’s pay was to ensure it met a condition of using the Bank of England’s Covid Corporate Financing Facility. A spokeseperson said: “As a result of agreeing the facility terms we were required to demonstrate senior pay restraint hence the reduction in the CEO’s pay from 2019/20 to 2020/21.”
Greg Campbell, partner at consultancy Campbell Tickell, said there’s “widespread concern” and recognition among senior executives in the social housing sector that the economic environment is calling for restraint, particularly given many residents have had their incomes hit hard.
He said: “At the same time, financial pressures on housing associations are growing with increased expectations around fire safety, building safety and decarbonsiaiton. This means that many or most organisations in this space are having to re-examine what funds they have available and how these funds are deployed, and the recognition of the need for pay restraint is part of that.”
He added that recent public comments on sector pay in housing have been “overstated”.
Keith Ward, audit partner and head of social housing at auditor RSM, also said concern over the impact of rent rises on tenants, which were allowed in 2020/21 for the first time for four years, may also have played a role in pressure on associations not to overly increase pay.
There were however some significant increases in overall pay from year-to year, and the average rise among the 15 housing associations increasing packages was 2.7%,.
The largest year-on year increase came from Midland Heart. The organisation’s chief executive Glenn Harris was paid £294,000 in total in 2020/21, an 11.8% increase on the £263,000 the previous year.
|Organisation||Total annual CEO pay % change||Chief executive||Total package 2020/21|
|Midland Heart||11.8||Glenn Harris||294,000|
Baljinder Kang, executive director of corporate resources at Midland Heart, said: “Our executive team’s salaries are independently benchmarked. This is approved by our remuneration committee each year, which is chaired by our senior independent board member.”
Sovereign’s Mark Washer received a 9.7% increase in his total earnings year-on-year, with the amount rising from £284,825 to £312,580,. However, a spokesperson said this was due to Washer turning down a performance-related pay award at the end of 2019/20 as the pandemic struck, so it did not consider this to be a pay rise.
Washer accepted a £42,000 performance-related pay award in 2020/21 which pushed up his total package when looked at year-on-year. Washer’s basic pay, excluding the bonus and other payments, rose 3.8% from £260,000 to £270,000.
Wakefield and District Housing increased the total package for its chief executive 8.7%, from £207,000 to £225,000 year-on year. The 2019/20 figure combined nine months of pay for current CEO Andy Wallhead and three months for previous CEO Kevin Dodd. WDH declined to comment on the reasons for the rise.
Hyde increased the total package for its chief executive, which in 2019/20 was split between Elaine Bailey and Peter Denton, by 7.1%. “This increase was due to a combination of the annual market rate review we undertake for executive salaries and the annual pay review”, a spokesperson said.
Bromford’s Robert Nettleton had a 5.6% increase in total pay, rising from £269,000 to £284,000 year-on-year.
A spokesperson said: “The Bromford board lead a heavily scrutinised process when assessing the remuneration of our executive team, including the chief executive.
“This process considers many factors such as independent benchmarking and market changes, organisational performance, retention, and our long-term sustainable success.”
The overall figures for the largest 25 housing associations also show a drop in emoluments for whole executive teams of 2.7%, from £37.4m to £36.4m. Board member pay however increased by 9.6%.
Total staffing costs increased by 3%, with 19 out of the 25 associations recording an increase.
Notes and methodology
Housing Today analysed the 2020/21 financial statements of the largest 25 housing associations in England by social housing stock owned according to the Regulator of Social Housing’s global accounts for 2019/20. The total earnings figure includes pay, pension contribitions, any discretional allowances and performance-related pay, but excludes compensation for loss of office.‘Basic pay’ excludes pension contributions and other allowances where these are stated in the accounts.
1. The total pay figure for Platform Housing Group for 2019/20 is the combined pay for Elizabeth Froude and David Pickering, who left part way through the year. A £199,000 compensation payment for loss of office has been excluded.
2.Sovereign’s figure for total CEO pay for 2020/21 includes a £42,000 performance-related bonus. Chief executive Mark Washer did not take his performance-related bonus for 2019/20 due to the pandemic.
3. Wakefield’s total pay figure of £207,000 for 2019/20 combines the nine months of pay of Andy Wallhead and three months of pay for former chief executive Kevin Dodd