Remuneration Committee | StaffNet | The University of Aberdeen

Remuneration Committee

Remuneration Committee

Terms of reference

1. Purpose and delegation

1.1 The Remuneration Committee ('the Committee') is responsible to the University Court for discharging its responsibilities with respect to the remuneration, emoluments and terms and conditions of employment of the Principal, senior post holders and posts designated as 'Senior Managers' and those on grade 9 and above of the pay spine, while they remain staff in post on this point. Section 8 covers the details of the committee's responsibilities.

1.2 Delegation

The University of Aberdeen Court has established a Committee of the Court known as the Remuneration Committee, as set out in statutory instruments.

1.3 The policies and processes used by the Remuneration Committee must be approved by the University Court.

2. Membership

2.1 Members of the Committee shall be appointed by the Court, having regard to the recommendations of the Governance and Nominations Committee, and shall be made up of:

Four independent members of Court, one of whom may be the Senior Governor;
Three internal members representative of academic staff, professional services staff, and a Senate Assessor;
One Student's Association nominated member of Court; and
An independent, external co-opted member with experience in human resources and/or people.

2.2 Membership of the Committee shall last for no longer than the duration of their term of office on Court or two terms of three years for independent, external co-opted members. No member of the Committee shall serve for longer than three terms of office, unless the Court, on the recommendation of the Governance and Nominations Committee, agree to do so. Where such an arrangement is approved by Court, full disclosure will be made in the relevant documentation.

2.3 The Committee Chair will be an independent member of Court. In the absence of the Committee Chair, another independent Court member will chair the meeting.

2.4 The Senior Governor will not chair the Committee.

2.5 The Committee will have the power to co-opt additional members subject to the approval of Court. Appointments will be made on the guidance of the Governance and Nominations Committee who will have considered the range of skills, competences and aptitudes required by the Committee to fulfil its duties in supporting the work of the Court and the University.

2.6 Only members of the Committee have the right to attend Committee meetings. However, other University officers or individuals may be invited to attend for all or part of any meeting, as and when appropriate and necessary. Regular attendees will include the Principal and Director of People. Such invitees must not be present when their remuneration package is being discussed.

2.7 The University Secretary and the Head of Governance and Executive Support will normally be in attendance at meetings (the latter as the committee clerk, as detailed in section 4). The University Secretary will recuse themself from items relating to their remuneration package. Other conflicted staff members will also recuse themselves when elements of their remuneration package or bonus arrangements are discussed (in line with 8.15).

2.8 The Committee may seek and engage professional advisers and consultants to support it in its duties. Such advisers and consultants will be invited to attend Committee meetings as and when required.

3. Quorum

3.1 The quorum necessary for the valid transaction of business shall be five members, at least two of whom shall be independent members of Court and one from either the staff or student constituencies.

4. Secretariat

4.1 The Head of Governance and Executive Support will act as Clerk to the Committee and will ensure that the Committee receives information and papers in a timely manner to enable full and proper consideration to be given to the issues under its remit.

5. Frequency of meetings

5.1 The Committee shall meet at least two times a year and at such other times as may be required to enable it to perform its duties.

5.2 All matters brought before the Committee shall be determined by a majority of those present at the meeting, and in the case of an equality of votes the Chair shall have a second or casting vote.

5.3 The schedule of meetings will be agreed annually.

5.4 No person other than permitted attendees shall be entitled to receive any papers relating to matters being considered by the Committee, unless authorised by the Chair. Governors and senior management team members of the Committee will be able to access suitably redacted papers and minutes via the secure online portal.

6. Notice of meetings

6.1 Meetings of the Committee shall be summoned by the Committee Clerk, subject to the prior approval of the Chair.

6.2 Unless otherwise agreed, notice of each meeting confirming the venue, time and date together with an agenda of items to be discussed, shall be forwarded to each member of the Committee and any other person required to attend, no later than seven calendar days before the date of the meeting. Supporting papers shall be sent to Committee members and to other attendees, as appropriate, at the same time.

7. Minutes of meetings

7.1 The Clerk should aim to prepare draft minutes for the Chair's approval normally within five working days of each meeting.

7.2 Following approval by the Chair, the status of the minutes changes from 'draft' to 'unconfirmed'. At this point, the Clerk may distribute the minutes to committee members and designated attendees.

7.3 Members will be asked to confirm whether the minutes are an accurate record of the discussion and outcomes at the next meeting of the Committee.

8. Remit, duties and reporting requirements

8.1 The Committee has delegated authority for considering and recommending to the Court the University's policy for senior staff remuneration, in accordance with the SFC's Funding and Outcomes Agreements; the Scottish Code of Higher Education Good Governance 2023 (the Code) and any supporting guidance relating to remuneration and severance packages; Committee of University Chairs (CUC) Higher Education Senior Staff Remuneration Code; and the CUC Guidance on Decisions Taken About Severance Payments in higher education institutions (HEIs).

The remit of the Committee is to:

8.2 Advise Court on matters relating to the pay, benefits, conditions and continuity of service of senior staff (as detailed in the Code, and advised by the Senior Management Team);

8.3 Seek comparative information on salaries and other emoluments and conditions of service in the (Scottish) higher education sector (such as CUC and UCEA);

8.4 Determine and review the remuneration, terms, benefits and conditions (and, where appropriate, severance payments) of the Senior Governor, Vice-Principals, the University Secretary/Chief Operating Officer, Professorial and Grade 9 officers and such other staff as the Court may from time to time determine;

8.5 Review and make recommendations to the Court on the terms, conditions and where appropriate severance payments to the Principal;

8.6 Ensure the performance of the Principal, as head of the institution, is assessed on an annual basis;

8.7 Oversee severance arrangements for all relevant staff, in accordance with the University's approved policies, and ensure that the University's pay framework and severance policy takes into account the SFC's Financial Memorandum with Higher Education Institutions, along with other guidance recognised as good practice by the SFC or University;

8.8 Review and consider the continuity of service arrangements for appropriate senior staff, as advised by the Senior Management Team;

8.9 Receive sufficient information on the pay and grading framework for all staff at the University not within the Committee's remit, their terms and conditions and their remuneration, including pay awards, to set and frame the Committee's work in the context of the institution as a whole;

8.10 Provide an annual report from the Committee to the University Court, to include the proposed annual statement, as required by the CUC Senior Staff Remuneration Code. The annual report should be consistent with the guidance provided in the CUC Senior Staff Remuneration Code.

8.11 The Committee shall carry out the duties detailed below for the University as a whole. The Committee shall:

8.12 Establish senior staff remuneration frameworks and policies that promote and support alignment with the University's long-term charitable purposes and aims, with any performance-related pay schemes relevant and proportionate to the higher education sector. Any proposals recommended to the Court must satisfy the SFC's requirements and other good practice principles of:

Being agreed by the Court in advance of any compensation;
Decided with independence, objectively, and avoiding conflicts of interests or loyalty;
Being robust in its application in light of the University's academic, research and financial performance as well as reflecting the level of challenge of each role involved;
Demonstrating value for money, being proportionate and defensible in terms of public sector pay;
Disclosing related party transactions in the annual reports and accounts as required in the Higher Education SORP;
Being fully documented; and
Being aware of the ability of the SFC to challenge decisions.

8.13 Ensure the design of senior staff remuneration policies and practices support the University's strategy and promote long-term sustainable success, with senior staff remuneration aligned to the University's charitable purposes and values, clearly linked to the successful delivery of the University's long-term strategy, taking into consideration guidance from the SFC relating to sustainability;

8.14 When determining senior staff remuneration policy and practices, consider the SFC's requirements within the Financial Memorandum with Higher Education Institutions[1] , CUC guidance and the Nine Principles of Public Life:

To be justifiable and in the best interests of the University;
Have regard for the public sector pay policy published by the Scottish Government;
Reflect the breadth and level of the individual's responsibilities; and
Demonstrate value for money.

8.15 No senior staff member shall be involved in any decisions as to their own remuneration outcome;

8.16 In determining the remuneration policy, take into account all other factors which it deems necessary, including relevant legal and regulatory requirements, the provisions of SFC and other relevant guidance, including the funding and outcomes agreements. The objective of such policy shall be to attract, retain and motivate senior staff members of the quality required to run the University successfully without paying more than is necessary, having regard to the views of relevant stakeholders (staff, students and trade unions) and the public sector market. The policy should be robust in its decision-making processes, transparent, proportionate, reasonable and justifiable to all staff;

8.17 Review the ongoing appropriateness and relevance of the remuneration policy. The Committee should undertake benchmarking exercises when reviewing its approach to executive remuneration. Where the University is an outlier in that benchmarking exercise, an explanation should be provided;

8.18 Where performance management and salary increases are deemed contentious, the decision making argument supporting them must be justifiable;

8.19 Within the terms of the agreed policy and in consultation with the Committee Chair and Principal, as appropriate, determine the total individual remuneration package of each senior staff member, including any bonuses or performance-related payments. The choice of financial, non-financial and strategic measures is important, as is the exercise of independent judgement and discretion when determining remuneration awards, taking account of the University and individual performance, and wider circumstances;

8.20 Increases should be awarded in line with clear, measurable key performance indicators. Other factors that should be taken into consideration by the Committee could include:

Academic and research performance and student satisfaction outcomes;
Academic and research challenges facing the University;
Financial performance (to provide for good and poor performance, flexibility in contracts to reflect those variables, levels of deficit/surplus and the internal and external auditor's view);
Other challenges facing the University (uniqueness of the institution's situation, significant concerns, the individual's role in delivering future plans, other accountabilities and local communications role);
The experience of the individual, including qualifications;
The need to attract, retain and reward the best staff possible to deliver the University's charitable and strategic aims;
The University's commitment to the principles of equality, diversity and inclusion are applied to discussions and recommendations; and
The total cost of packages offered (including any performance-related pay, pension contributions, salary sacrifice arrangements, any compensation for loss of office, other taxable benefits, non-taxable benefits only available to the senior management team, and other remuneration such as car allowance).

8.21 Have full authority to appoint remuneration consultants and to commission or purchase any reports, surveys or information which it deems necessary at the expense of the University after liaising with the full Court and University Secretary. However, the Committee should avoid designing pay structures based solely on benchmarking to the market or on the advice of remuneration consultants;

8.22 Monitor compliance with the University's policies relating to other paid work arising from consultancy and entrepreneurial activities and how such policies impact the University's salary framework;

8.23 Review the design and effectiveness of all senior staff remuneration frameworks for the University, including any performance-related pay aspects, with a regard to the wider impact of the University's policies and goals on recruitment, retention and reward, as a whole. For any such plans, determine each year whether awards will be made, and if so, the overall amount of such awards, the individual awards for senior staff, and the performance targets to be used taking into consideration the factors detailed in clause 8.20 above;

8.24 Work and liaise as necessary with other Court committees, ensuring the interaction between committees and with the Court is reviewed regularly;

8.25 The Committee Chair shall report to the Court after each meeting on the nature and content of its discussions, recommendations and action to be taken;

8.26 The Committee shall make whatever recommendations to the Court it deems appropriate on any area within its remit where action or improvement is needed, and adequate time should be available for Court discussion when necessary;

8.27 The Committee shall provide a description of its work in the annual report;

8.28 The Committee shall also ensure that provisions regarding disclosure of information as set out in the Higher Education SORP and SFC funding agreement, and statutory guidance is fulfilled, and that a report on trustee (Court member) expenses and related party transaction policy and practices is included in the University's annual report;

8.29 If the Committee has appointed remuneration consultants, the consultant should be identified in the annual report alongside a statement about any other connection it has with the University or individual trustees/Court members or senior staff members.

9. Engagement with stakeholders

The Committee Chair should attend the Court's annual stakeholder engagement event to answer any questions on the Committee's activities.

10. Other matters

The Committee shall:

10.1 Have access to sufficient resources in order to carry out its duties, including access to the University's Governance and Executive Support Team for advice and assistance as required.

10.2 Be provided with appropriate and timely training, both in the form of an induction programme for new members of the Committee and on an ongoing basis for all members of the Committee.

10.3 Give due consideration to all relevant laws and regulations, the provisions of SFC, and its guidance, including the funding agreement, as appropriate.

10.4 Ensure that a periodic evaluation of the Committee's own performance is carried out.

10.5 At least annually, review its terms of reference to ensure it is operating at maximum effectiveness and recommend any changes it considers necessary to the Court for approval.

11. Authority

Where the Committee considers external independent recruitment or benchmarking advice or expertise is required to fulfil its remit, it will agree whether this is necessary in consultation with the University Secretary. The University Secretary's prior approval will be required before any external consultant or adviser is approached.

12. Confidentiality

Given the nature of the business to be conducted by the Committee, every consideration and effort will be taken to protect confidentiality of personal and sensitive data. Notwithstanding that requirement, where appropriate and in line with the University's Publication Scheme and Agenda, a summary of the Committee's activities will be made available on web pages/staffNet.

13. Review

These terms of reference were approved by the University Court and are subject to their review and amendment periodically and when necessary.

Date of approval: 8 March 2024 Date of next review: February 2025

[1] Para. 13, Financial Memorandum with Higher Education Institutions, SFC, 2014.

Composition & Membership

Composition:

An independent member of Court (The Chair not to be the Senior Governor)
Four independent members of the University Court (including the Senior Governor)
A Senate Assessor member of Court
A staff member of court (who is not a Senate Assessor and who may be another elected staff member of Court or a trade union nominated member of Court)
A Students' Association nominated member of Court
An external (lay co-opted) member (vacancy)