Third of housing association chiefs 'have had pay frozen' - Smith & Williamson

Nearly a third of housing association chief executives have had their pay frozen during the past 12 months, according to new research from Smith & Williamson.

The accountancy group's annual survey of senior level reward also showed that 47% of respondents expect housing association pay levels to be frozen in 2010.

According to Smith & Williamson: "Inflationary trends are a key influence for 61% of respondents, so it is not unexpected that the median expected rise is just 0.5%.

"However, 47% expect to freeze their pay levels and the remainder predict a median rise of 1.25%. The highest predicted rise is 2.5%."

By matching the returns of the participants who have participated in the survey two years running, Smith & Williamson also revealed that executive pay has increased by an average of 2.1% over the past year while the average pay rise given to all staff in this group was 2.2%.

Survey findings:

• 31% of these Chief Executives have had their pay frozen.
• 44% received increases of between 2% and 4%.
• The highest pay rise recorded was 7.2%.

Bonus culture

Most executive bonus schemes are discretionary and closely regulated by the association’s board or remuneration committee.

Smith & Williamson reports that associations face a common dilemma, torn between setting up an objectively based scheme and ensuring sufficient room for discretion.

Boards are focused on seeing a tangible improvement in corporate performance before bonus payments are made, but are still unsure about the quantum of payments to executives.  As a result, many prefer to focus reward on basic pay. 

Findings:

• 42% of respondents operate some form of bonus scheme for their employees.
• 36% of Group Chief Executives were eligible for a bonus, but only half of these received a payment in the last 12 months.  The average bonus received was 12.5% of basic pay (up from 7.3% last year).
• 26% of Chief Executives of single entities were eligible for a bonus.  86% of these went on to receive a bonus, with average payments of 6.7% (down from 7.7% last year).

Gender pay gap

With the Equalities Act due to be come law in 2010, equal pay issues remain a hot topic. The Smith & Williamson housing association executive reward survey analyses the overall reward packages of senior level employees at single and group housing associations across the UK.

The average gender pay gap was analysed by hierarchical level amongst participants to compare the earnings of female and male workers.

The signs of progress in the sector are encouraging:

• At Chief Executive level, the gap has narrowed from 29.5% last year to 23.5% this year. 
• At Group Director level the gap this year is 16%.
• At single entity Director level the differential remains slight - last year it was 2.6%, and this year it stands at just 2.4%.

By comparison, the Office for National Statistics reported in November 2009 that the overall full-time gender pay gap in the UK has narrowed slightly over the past year from 12.6% to 12.2%.  At managerial level, the gap is 20.2%.