12% pay difference at chief executive level between similar sized housing associations

Smith & Williamson, the accountancy and financial services group, has just published a housing association executive reward survey which highlights the difference in salary between senior staff at housing association groups and single associations. The survey also reveals a growing trend towards performance related pay and has found that half of surveyed organisations are operating a bonus scheme for their top tier.

The average pay for the chief executives of the largest groups is £214,038 per annum, which is more than double the average of £102,428 pa for a chief executive of a single association entity. The survey has found that this pay difference is not just due to the size of the organisations, but that the association structure also has a significant influence.

Taking an association of £80 million turnover, a chief executive of a group structure can expect to command a salary that is 12% higher than if they headed a single association entity with the same turnover. This differential also applies at director level, where a group director can expect to be paid 35% more than a single association director.

Other key points from the survey include:

56% of housing associations have a bonus scheme in place for senior management Of those, only 60% of chief executives and 41% of directors received a bonus payment in the last year The average level of bonus is 7.3% of salary 21% of surveyed associations have a bonus scheme that applies to all staff, whilst 45% have a scheme purely for their executive teams

The report analyses the different executive roles, housing association structures and reward packages in considerable depth. Data is analysed by seniority of role, gender, turnover, number of employees, units under management, region and job function. The survey focuses on top team posts and analyses total reward packages, including bonuses and benefits. These cover: holiday entitlement, pension schemes, private medical insurance, company cars, family friendly benefits and use of flexible benefit schemes.

Rachel Stone, partner at Smith & Williamson, said: "This survey differentiates between group and single association roles, recognising the differences in complexity and management challenge. Because of this, the data provides valuable and accurate insights into total reward at the most senior levels in housing associations."

Most associations rely on inflation trends and RPI to guide their pay decisions each year. However, Smith & Williamson's pay and reward team is seeing an increasing desire to link pay more closely to performance.

Rachel continues: "Almost half of the surveyed associations have no link between pay and performance at present, but a good proportion are keen to change this. We have supported several associations to develop mechanisms to ensure that pay rises are based on merit rather than on ‘cost of living'. This helps associations to target limited pay budgets at their best performing staff to encourage the recruitment and retention of high calibre people. At executive level, this has usually meant a clear link between achievement of corporate key performance indicators and the level of pay increase for the executive team."

About the survey:

This is the first edition of the Smith & Williamson Housing Association Executive Reward Survey. It is designed to provide associations with detailed and current information on executive pay. The survey is a useful benchmarking tool for associations as they review the remuneration packages of their senior level employees. The data collected represents 232 individuals from 33 associations, representing the spectrum of Registered Providers. It includes 6 of the 10 largest organisations in the sector (in terms of annual turnover) and 4 with turnovers in excess of £200 million.

The full survey report is available to purchase for £450. Housing Associations with less than 50 employees are eligible for a discounted price of £225. To order a copy please e-mail Rachel Bennett at rachel.bennett@smith.williamson.co.uk or telephone on 0117 376 2369.

For further information contact

Rachel Stone, partner, People Management
0117 376 2066
rachel.stone@smith.williamson.co.uk

Karl Ellis, HR consultant at Smith & Williamson on
0117 376 2082
karl.ellis@smith.williamson.co.uk

PR enquiries to:

Jess Koslow 0207 131 4264 or jess.koslow@smith.williamson.co.uk
Kate Harrison 0207 131 4228 or kate.harrison@smith.williamson.co.uk

Disclaimer

By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.

Note to editors

Smith & Williamson is an independent professional and financial services group employing over 1,500 people. The group is a leading provider of investment management, financial advisory and accountancy services to private clients, professional practices and mid-to-large corporates. The group operates from offices in London, Belfast, Birmingham, Bristol, Dublin, Glasgow, Guildford, Maidstone, North London, Salisbury, Southampton and Worcester.

Smith & Williamson Limited Regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities. A member of Nexia International, a worldwide network of independent accounting firms.

Smith & Williamson Financial Services Limited

Authorised and regulated by the Financial Services Authority.