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
The College regularly benchmarks rates of pay against external comparators. A working group led by the Dean of the Faculty of Engineering is currently reviewing academic international pay and employment terms. The College aims to pay mid to upper quartile rates of pay for all its staff against appropriate external comparators wherever possible within financial constraints.
Annual cost of living pay review
The College’s annual cost of living pay review for all staff on local pay bargaining terms and conditions is jointly negotiated with the College Trades 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 August 2018 the College implemented a pay increase of 3%, subject to a £1,000 minimum and £3,000 maximum increase. The College also reduced the working hours from a 37.5 to a 37-hour week without a commensurate reduction of the annual salary of staff employed on the level 1 grade. This resulted in an improved hourly rate for staff on the lowest level of £10.70 per hour (a total increase as a result of this year’s pay award to 7.5%). This was the third consecutive year that the College adopted a tapered approach to provide an increased benefit for lower and middle grades. This pay offer was accepted by the recognised Joint Trades Unions. The contractor minimum rate for those employed primarily on College activities was also set at £10.60 per hour, which was 3.9% above the London Living Wage at that time.
Finally, the College invested an additional £1.5 million into research grades and £1 million into academic grades for new salary scales that were introduced on 1 August 2018 (for academic staff) and 1 April 2019 (for research staff). The main changes were a new 29 point salary structure in place of the current 47 point pay spine, an increase in the minimum starting salary for all academic and research grades, and accelerated salary progression.
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. 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; these are chaired by the Deputy Chair of the Council. It 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.
At the July 2018 meeting the Committee reviewed the latest information on the revised guidance from the Committee of University Chairs and the Office for Students to ensure the revisions to the Terms of Reference agreed at Council in February 2018 were compliant. Two changes were implemented: one that the Deputy Chair of Council would chair the Remuneration Committee when the President’s remuneration is under consideration, and the implementation of the retention of external income policy.
The Committee met in November 2018 to receive information on the College’s remuneration strategy, pay and pension benefits, and also to review and approve the salary and emoluments for the President and the staff members of Council. The Committee reviewed the salary information for the members of Council reporting to the Provost and President. Staff members of Council received the 2018 pay award applied to all staff, so 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 also undertakes a senior staff pay review, using the College-published Pay Relativity criteria, comparing the salaries of all staff earning more than £100,000 with benchmark data from the University Council for Education Administration (UCEA) Senior Staff Remuneration Survey and the Russell Group Salary Surveys for Non-Academic Management, Professors and Readers.
The Remuneration Committee’s review of the President’s salary considered: comparable data on pay and benefits from UK higher education institutions; the 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. Further details of the President’s remuneration are included in Note 7 to the Financial Statements.
Income derived from external activities
On 1 August 2018, the Remuneration Committee agreed the new College Retention of Income from External Interests policy that 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. In 2017, the President was selected to join the newly-created UK Research and Innovation (UKRI) Board and has continued to serve on this board. 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 2018, 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 is not remunerated.
The gender pay gap
In 2018–19, the College published details of its gender pay gap. This shows that the gap between the median hourly pay of men and women at Imperial is 7.6%. In comparison to the College’s 2017 gender pay gap, there has been a small shift, with a higher proportion of women represented in the upper-middle and upper quartiles.
This gender pay gap is not the same as equal pay; Imperial pays men and women the same for work of equal value.
The main reason for Imperial’s gender pay gap is that the College has more men than women in its senior roles. The lower three quartiles have nearly a 50–50 split between men and women, but the top quartile is 69.3% men and 30.7% women.
The College’s median gender pay gap is lower than the 2018 national average for all employers, the higher education sector as a whole and other research-intensive universities in the Russell Group. The College is committed to addressing the imbalance by introducing some new projects to complement existing initiatives, including a College-wide mentoring scheme which can help career development and address barriers, and the Career Moves Guide to create greater transparency about progression for Professional, Technical and Operational staff. The College is also forming a working group which will take a deeper look at the data to gain insight into what this shows about gender, ethnicity and intersectional pay gaps.
The College offers 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 £58,590 per annum, and contributions on salary above this level are invested into the defined contribution section. Members currently pay 8.8% of salary and the College pays 19.5% of pensionable pay into the scheme each year for each member; however, this increased from 1 October 2019, to 9.6% and 21.1% respectively. A further valuation will take place in 2020.
In March 2018, Universities UK (UUK) and the UCU put benefit reform discussions on hold while a Joint Expert Panel (JEP) examined the 2017 valuation and agreed key principles to underpin a future joint approach. In September 2018, the JEP issued their first report undertaking a retrospective review of the 2017 valuation and exploring the scope of possible adjustments to the methodology which would allow the valuation to be concluded. The initial reaction to the report from UUK and UCU was positive. The College requested that USS gave full consideration to the outputs of the JEP work prior to making any changes to contributions in 2019 and beyond. USS concluded that it is legally required to complete and submit the 2017 valuation to The Pensions Regulator along with the phased increase to contributions covering the period 1 April 2019 to 1 April 2020. They also agreed to perform an additional actuarial valuation at 31 March 2018 and would undertake to incorporate some, not all, of the recommendations from the JEP. This 2018 valuation, which was finalised in September 2019, increases the aggregate combined contribution from members and employers to 30.7% with effect from 1 October 2019, replacing the higher rate arrived at after the 2017 valuation.
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 also valued every three years. The last valuation carried out was as at 31 March 2017, which showed a small surplus.
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 2020.