Principles of remuneration
Imperial’s pay and benefits package is a critical factor in our ability to attract and retain an outstanding and diverse staff community.
We are committed to offering all staff a pay and benefits package that is equitable, fair and appropriately reflects the College’s standing as a world leading university.
Rates of pay
We regularly benchmark rates of pay against external comparators. We aim to pay mid to upper quartile rates of pay against these comparators wherever possible within financial constraints.
On an annual basis, the College shares pay and benefit information with staff and asks for their input on focal areas for the College in relation to remuneration. A working group led by the Dean of the Faculty of Engineering was formed following feedback discussions, to review academic international pay and employment terms. The outcome of the review will be considered by Provost’s Board to determine any changes required to our current approach.
Annual pay review
Our annual pay review for all staff on local pay bargaining terms and conditions is jointly negotiated with the Joint Trade Unions (the University and College Union (UCU), Unite and UNISON). The review considers all elements of reward that impact on staff costs. The College sets the award, taking into account affordability as the principal requirement, assessed against staff demands based on inflationary pressures, feedback from the annual pay and benefit consultation exercise and a review of recruitment and retention information.
On 1 September 2019, we implemented a pay increase of £1,080 across all salary scales subject to the award. The increase was backdated to 1 August 2019 and resulted in a 5% increase for the staff on the lowest pay grades earning £20,000-£21,000 per year, a 4.9% to 2% increase for salaries up to £55,000 and a 1.54% increase for salaries at £70,000. This pay offer was not accepted by the recognised Joint Trade Unions, but was informally indicated as the preference of two out of the three unions. The contractor minimum rate for those employed primarily on College activities was set at £11.16 per hour, which was 5.6% above the London Living Wage at that time.
The COVID-19 pandemic has led to uncertainty over both student numbers and research funding for the 2020–21 academic year, and their financial impacts. In March 2020, in consultation with the Joint Trade Unions, we decided to postpone local pay negotiations until October. At this point, we will have a clearer view of student numbers and research funding. Any agreed pay increases will be backdated to 1 August 2020.
In recognition of the impact of the COVID-19 pandemic, the President and Provost took a voluntary 20% reduction in their pay for six months from 1 May 2020. The other members of the President’s Board volunteered for a 10% pay reduction over the same period. The monies saved were allocated to provide one-off payments to staff and students experiencing extreme financial hardship due to the COVID-19 pandemic.
Remuneration Committee
The Committee meets at least twice a year to review and approve the remuneration of the President and the Provost, their senior staff direct reports and members of the Provost’s and President’s Boards. Outside of formal meetings, the Committee reviews and agrees salaries for senior roles. It also reviews the College’s overall reward strategy to ensure that its remuneration practices are being managed in a fair and equitable way.
The Committee is chaired by the Chair of the Council, except for matters relating to the President’s salary, which are chaired by the Deputy Chair of the Council. The Committee comprises external members of the Council. The Provost and President are invited to participate in discussions on specified agenda items, including recommendations relating to the salary reviews of their direct reports, but they are not members of the Committee and are not present for discussion of their own salary. The terms of reference of the Committee can be found in the governance section of this report.
The Committee met in November 2019 to receive information on the College’s remuneration strategy and pay and pension benefits, and to review and approve the salary and emoluments for the President and the staff members of Council. The Committee also reviewed the salary information for the members of Council reporting to the Provost and President.
Staff members of Council received the 2019 pay award, as it applied to all staff. The Committee also undertook a senior staff pay review using the following sources: the College-published Pay Relativity criteria and benchmark data from the Universities and Colleges Employers Association (UCEA), Senior Staff Remuneration Survey and the Russell Group Salary Surveys for Non-Academic Management, Professors and Readers. The review was to consider whether any additional adjustments to pay were appropriate. There was one recommendation for a further adjustment to pay for a staff member of Council based on the exceptional contribution of the individual and the external market benchmark.
The Remuneration Committee’s review of the President’s salary considered: comparable data on pay and benefits from UK higher education institutions; the World University rankings; the President’s remuneration as a multiple of the median pay for all other employees; the President’s progress in meeting her performance objectives; and the Committee of University Chairs Survey benchmark. The President declined any increase in pay. The Committee considered it important that the President’s pay maintained alignment with benchmark salaries and agreed to implement an increase to the President’s pay in line with the final pay award made to all College staff. Further details of the President’s remuneration are included in Note 8 to the Financial Statements.
At the July 2020 meeting, attendance was extended to the Deans of Faculties and the Business School to review and discuss their plans, objectives, targets, and activities to address the College gender and ethnicity pay gaps.
Income derived from external activities
During the year, the College Retention of Income from External Interests policy, agreed on 1 August 2018, was reviewed by the Remuneration Committee. This will be reviewed annually, or as external regulations require. The policy encourages the closest possible liaison between staff and industry, professional bodies, commerce, charities and government departments, including via personal directorships, partnerships, consultancies (including private clinical practice), trusteeships, trade engagements, membership
of official committees and intellectual property licensing and involvement in spinout companies.
The policy allows staff, subject to prior approval, to be engaged in general paid and unpaid activities. Members of the College must request approval for external activity. They must disclose the number of days that will be committed to the activity, and senior officers of the College must also disclose any personal remuneration that will be received from the activity. In reviewing requests, the College considers whether the activity could compromise the full performance of the College member’s duties and how the activity could serve the interest of the College and the College member.
The College recognises that staff engaging in external activities such as directorships is integral to the delivery of its mission, enhances collaboration with partners and creates opportunities to influence and inform policy. In keeping with the College policy on external activities, the President was granted permission to serve on the Board of Trustees for KAUST University, the Singapore Academic Research Council and the Board of Directors of Chevron Corporation, as agreed upon in her acceptance of the offer to serve as Imperial College London President. She resigned from the KAUST board in December 2019. In 2017, the President was selected to join the newly-created UK Research and Innovation (UKRI) Board and has served on this board for two years. These memberships benefit the College by fostering international collaboration, enhancing its global reputation and strengthening ties with industry.
The President’s annual compensation from Chevron, which is deferred until retirement from the board, was $375,000 in the year ended 31 December 2019, comprising $225,000 in shares of Chevron stock and $150,000 cash. She donates the entirety of her remuneration from UKRI (£9,180 per year plus £459 per day for additional service) to the College. She receives $10,000 a year for her work with the Singapore Academic Research Council to cover incidental expenses. Her position with KAUST was not remunerated.
The gender pay gap
Our annual publication shows an 8.0% gap between the median hourly pay of men and women at Imperial. While the gender pay gap between 2017 and 2018 had started to close (from 9.4% to 7.6%), the trend has not continued.
The main factor driving our gender pay gap is that we have more men than women in our senior roles. Our lower three quartiles have nearly a 50–50 split between men and women, but the top quartile is 68.2% men and 31.8% women. The gender pay gap is not the same as equal pay; we pay men and women the same for work of equal value.
Our median gender pay gap is lower than the 2019 national average for all employers, the higher education sector average and the average for other research-intensive universities in the Russell Group. We are committed to removing the imbalance and have extensive initiatives in place to address it. Regular reviews will help us understand which actions have the biggest impact in reducing the gap.
Pensions
We offer three pension schemes to staff and casual workers: the Universities Superannuation Scheme (USS), the Superannuation Arrangements of the University of London (SAUL) and the NHS Pension Scheme. Each scheme has different eligibility criteria, which are related to job roles and pay grades.
USS is a national scheme for universities, research and educational bodies, and it is open at Imperial to all staff in academic or comparable posts. It is a hybrid scheme, partly defined benefit and partly defined contribution. Members currently earn a defined benefit pension on salary up to £59,585.72 per annum, and contributions on salary above this level are invested into the defined contribution section. Members currently pay 9.6% of salary and the College pays 21.1% of pensionable pay into the scheme each year for each member. A further valuation is currently underway and is due for completion by 30 June 2021.
SAUL is open to colleges and other institutions with links to the University of London. It is a defined benefit career average revalued earnings scheme whereby a member’s pension is based on their pensionable pay right across their career. The College currently contributes 16% of pensionable pay into the scheme year for each member. The scheme is valued every three years. The last valuation carried out was as at 31 March 2017, which showed a small surplus. The 2020 valuation is underway and due to be completed by 30 June 2021.
Staff who have pension rights in the NHS Pension Scheme on taking up a post within the College may remain members of the scheme. The scheme rules preclude the College from offering the scheme to anyone who would be joining the scheme as a new member. It is a nationally administered scheme that covers NHS employers, General Practices and other bodies, allowed under the direction of the Secretary of State in England and Wales. It is a defined benefit scheme into which the College currently contributes 14.38% of pensionable pay each year; the rate was due to increase from 1 April 2019 by 6.3%. However, the College, in common with most other medical schools, will only be required to pay an additional 1.8% of pensionable pay for the period to 31 March 2021.