Is Andrew Hamilton’s salary justifiable?

YES! –  Alexander Rankine 

It is terribly vulgar to discuss money. But my, what fun it is to know how much our exalted vice-chancellor rakes in every year under that billowing academic gown. £424,000 really is a lot of wonga. A lot. Grab a calculator and see for yourself. It is 16 times the average wage. Number crunching off Wikipedia it appears to be 1/14 of Harris Manchester’s entire endowment. Or fully a 1/3 of Regent’s park’s. You could put 47 students through undergraduate courses for a year with that package. Even after tax, and allowing a generous 50 grand to live off, there would still be enough left over to buy a Ferrari. Paid to one man. Every year.

Perhaps it is a mark of the hopeless groupthink and right-on nature of student journalism that none of us really wanted to defend the generous torrent of moolah funnelled annually by our university to its chief executive. Even our resident right-winger on the comment team developed a sudden case of one nation-itis and demurred (pace). Your very own loyal correspondent drew the short straw in the matter. But how to proceed? The money facts above were probably not a good start. Whoops. Yet even taking another tack, on a free market perspective I think you would struggle to make the case that the university need pay top dollar for top talent in a competitive field. AndrewHamilton earns £153,000 more than his Cambridge counterpart. I know we are better than the tabs, but really? One wonders what majestic wonders and mighty works our vice-chancellor must be required to perform to justify such a premium.

Now, I may well be horribly wrong. The problem with figures like this is that they are somewhat opaque. When a pay package is quoted as ‘worth’ a certain amount of money, it does not mean that the recipient is receiving it in cold hard cash or ready gold bullion delivered to his door with the milk every morning. There will be all sorts of pension rights and assorted benefits counted in. The exchequer will take a hefty slab off that headline figure as well. It is also hard to know whether we are comparing apples with apples. The Oxford vice-chancellor’s job may indeed require more of its holder than that elsewhere. Most of us barely know Andrew Hamilton or what he does behind the scenes. My enduring image is of him dressed up and declaiming Latin at matriculation. There is definitely more to the role than that.

When we discuss the matter then, we should first recognise our relative ignorance over the particularities. But it raises a broader issue about executive pay about which we are better able to have a discussion. Those at the top should be rewarded. They have to put up with enormous stresses and responsibilities. They have to endure the national papers disclosing their salaries and criticising their decisions. Moreover, the truly capable are only a limited pool, and they need to go to where they can be most productive. The wage mechanism acts in a market to ensure this. But there are limits.

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How much is too much? Here’s one idea. The Cameron government has started pushing for top public sector salaries to be a maximum of twenty times the full time wage of the lowest paid in their organisations. 1/20 of Hamilton’s salary is £21,200 – a good deal higher than the minimum wage. But then Oxford is in many ways a private entity (though state subsidised to an ever declining degree) which must compete internationally with the likes of Yale – at which Hamilton was once provost on a generous salary. Compare the situation here to some private salaries. Bob Diamond got £17 million in pay and perks amidst accusations of tax avoidance and libor fixing. That is 158 times someone on a full-time minimum wage. Disgusting. Andrew Hamilton’s salary does look a bit high, but for a quasi-private organisation and a job of which most of us understand little, it is at least in the right ballpark.

NO! – Jennifer Brown 

It’s the same old bleak story. Banks go bust. Country faces recession. Government intervenes. Wages are cut. Sorted – until figures are released.

Then, bonuses are in. Salaries have risen. The public complains. Promises are made. It’s incredibly tiring. Even having to write about the blast thing is a miserable affair: after the multitude of headlines on the “out of control” executive salaries, you would at least think those representing higher education and, by proxy, the very students subjected to a huge rise in tuition fees last September, would stand firm against the tantalising prospect of yet more money flowing their way.

But no. University tuition fees go up and, accordingly, so too do the salaries of its highest officials, the Vice -Chancellor’s who should know better. Thus we see the pay and pensions package for VC’s in 2011-2012 averaging at £247,428 and Andrew Hamilton, Vice-Chancellor for the University of Oxford, topping the table for highest paid university leader with his annual salary, pensions and benefits package accumulating to a whopping £424,000. Meanwhile, higher education staff face real-terms wage cuts.

Although the Russell-Group defended the increase of 0.5%, or 2.7% if you exclude pension payments and average only the basic salary and benefits total of £219,681, as “only very modest”, this is hardly the point. Whether it was a small or large increase, it was nevertheless an increase on what was already a phenomenally large pay package – all at a time when university students are paying more than ever for tuition fees. So whilst some families scrimp and save to ensure their child can receive the same access to and quality of education as the more prosperous, and then, once there, face the next challenge of an increasingly expensive cost of living (rising rents and meal prices in Oxford notably) those in charge of such institutions are free to loosen their pockets and relax, most likely believing their wages are completely justifiable given the ‘nature’ of their work.

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And perhaps this is the very crux of the issue: there remains in society this absurd notion and entrenched belief that those holding prestigious positions should be given an astronomical wage packet to reflect, quite simply, their seniority. True, such figures may aim to reflect the difficult work load and number of hours employed by the individual on a daily basis. And indeed, one could argue the high profile nature of certain professions does warrant some high fiscal remuneration, especially when privacy is at stake. Yet I hardly see how this argument can stand true for anything longer than two minutes before someone pipes up with the blatantly obvious response: what about the Prime-Minister? Doesn’t he only get paid £142,500? I say ‘only’ and of course I am not suggesting that this is by any means a small sum – a three figure salary remains a far cry from the national average of £26,200. But when we consider Cameron’s position, constantly in the media spotlight, representing Britain and responding to the pressures of policy making and public critique, the £142,500 a year salary does become a little easier to digest, relatively speaking.

The same cannot be said for the Vice-Chancellor, however. Yes, he may “provide strategic direction and leadership to the collegiate University” and represents “the University internationally, nationally and regionally” – without a doubt a huge and influential job – but surely the Prime Minister provides strategic direction and leadership to the country, and represents Britain internationally, nationally and regionally too? And yet Hamilton is paid a great deal more for his efforts.  

But, as is always the case, we are forced to hear some rubbish from the chief executive of Universities UK (another big earner, I am sure) about how Hamilton’s and other vice-chancellor’s salaries across the UK are in line with those in competitor countries and similarly sized public and private organisations, therefore we should obviously accept and move on from our silly little rants about wages because hey, we wouldn’t want to become uncompetitive.  And you start to wonder whether they think we are the deluded ones.