Issues for trustees considering a CEO’s remuneration.

Marie Stopes International  has been warned by the Charity Commission that its work faced being “undermined” over the decision   to award its CEO a bonus equivalent to his salary.Simon Cooke  the chief executive earned £434000 last year  including bonuses- up from £300532 in 2017.

The charity had not been able to provide the Commission with evidence that a proper and robust discussion took place either at full board or at the charity’s remuneration committee about the appropriate level of pay to be awarded to the CEO. Nor could the trustees show that they had taken into account all the relevant factors, as required by the Commission’s guidance. The trustees had told the Commission that a robust discussion did take place, but was not properly noted or minuted.

The trustees have been issued with formal advice under section 15(2) of the Charities Act 2011, requiring them to “review the factors it takes into account when making decisions about the CEO’s remuneration”. The trustees have also been directed to ensure that all their decisions are adequately recorded so that the factors taken into account are clearly set out, as well as the final decision.

This is a good reminder to charities to ensure they have adequate procedures in place when assessing appropriate levels of remuneration for employees and that evidence of the decision making and reasons can be produced if required as evidence.

Ultimately the decision on how much to pay a charity’s CEO is for trustees to make. The Commission cannot dictate to charities how much they should pay their staff.

However, charity law sets out the duties and responsibilities of charity trustees. These include principles that must be followed when making decisions on behalf of their charities. Those principles are reflected in our published guidance: The Essential Trustee, and It’s Your Decision.

Similar Articles

Charity Commission new gu... The commission has published new guidance for charity trustees about fundraising from the public, CC20. The guidance sets out 6 key principles to help trustees comply with
London Olympics legacy f... More amateur sports charities have been set up and the sector’s income has increased in the years following the London 2012 Olympics, an analysis by the Charities
Trading Subsidiaries – ... The purpose of trading subsidiaries of charities is simple. The wholly owned trading subsidiary undertakes the commercial trading activities that do not fall within the objects of
Government launches new s... Free online resource for charities launched by the Government. It is a safeguarding portal created to help charities handle safeguarding concerns or allegations. See https://safeguarding.culture.gov.uk/ The portal
Charity Digital Tech Conf... Charity Digital News ran a Charity Digital Tech Conference 2019 and you will find useful videos of the speakers here   https://bit.ly/2JxrmgR covering  website design, social media
Resources to help prevent... Charity fraud awareness week (18-22 October 2021) has just finished but sadly fraud will carry on. It is worth checking this webpage for information which may assist
Digital Technology – co... The digital age matters to trustees as it affects key areas such as strategy, governance, fundraising, marketing, cybersecurity, culture and service delivery. It also brings opportunities, risks
Seeking volunteers for y... Seeking  volunteers for your charity? The normal methods of recruitment will be : word of mouth personal recommendation advertising in national or local press Websites where you
Prevention of fraud ̵... You can take this preventative action now:  make sure charity software has up-to-date virus protection (though it will not always prevent you from becoming infected) 
Blenheim Palace granted c... Blenheim Palace has been registered with the Charity Commission  as the “Blenheim Heritage Foundation” with objects including restoring and preserving the site for the public benefit and

Leave a Reply

Your email address will not be published. Required fields are marked *