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

Prevention of fraud in a ... # Charities like other organisations regularly fall victim to frauds. A new website at http://charitiesagainstfraud.org.uk/ gives useful guidance to help prevent this Some tips to help reduce
Richmond Group of Chariti... Research commissioned by the Richmond Group of Charities shows that charities can add value to the health and care system in a number of ways – which
1% of charities get most ... Only 1% of  charities received 75% of  charitable income last year.Charities in England and Wales had a combined income of £72 billion in 2015 according to the
Recruitment of new truste... In accordance with the Charities Act, an individual is currently prevented from acting as a charity trustee if they have an unspent conviction for an offence of
Guidance for trustees of... This guidance is for trustees of charities that have a long-term close relationship with a connected non-charitable organisation such as a: trading subsidiary commercial business not-for-profit organisation
Welcome to our blog stay tuned for more information.
Preventing and tackling c... The Fraud Advisory Panel have produced new resources to help you prevent, detect and respond to charity fraud. Check out https://goo.gl/2RrbPx
Changes to annual return ... The Charity Commission has made a number of amendments to the content of the annual return for 2018 (AR18), after an extensive consultation with charities throughout the
Do you wish to volunteer ... The Royal Voluntary Service has launched a new advertising and recruitment campaign to increase volunteering by older people in local communities. The campaign will encourage people to
Press release from Charit... The Charity Commission, the regulator of charities in England and Wales, has published the findings of a study which has found that cultural factors, such as placing

Leave a Reply

Your email address will not be published.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