The CIPD has defended the remuneration package awarded to its chief executive Jackie Orme for 2009/10, following criticism of her increased bonus and overall size of the package.
Orme was the recipient of a significant increase in performance-related bonus in the year 2009/10, leading to questions as to what aspects of the institute’s performance triggered the increase.
The bonus increase, from £57,000 to £85,000, was published in the CIPD’s annual report and financial statements for the year ending 30 June 2010 and was greeted with criticism on the Donald Clark Plan B blog, with commenters questioning the justification for Orme’s remuneration package. The report also showed that Orme’s basic salary rose by 2.2%, from £270,000 to £276,000.
The total value of Orme’s package is detailed by the CIPD report as £399,000. This is more than three times the average total of chief executives in comparable positions at other charities with a £25 million-plus turnover. XpertHR’s voluntary sector salary survey for 2010/11 found an average package of slightly more than £121,000.
The increase in Orme’s bonus also comes despite criticism last year that she received a bonus at all, given the uncertain state of the economy, and pay and bonus freezes elsewhere.
The figures also revealed that Orme had received reduced pension contributions – down to £25,000 from £64,000 the previous year.
Responding to the criticism, a CIPD spokesman said: “There is an element of Jackie’s package which is performance-related, and which is linked to a scorecard of clear objectives. The main point is that against that scorecard, the institute has had a successful year.”
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When asked about the specifics of the scorecard of objectives against which Orme had been measured in order to justify the performance-related bonus, the spokesman replied: “That level of detail is between the remuneration committee and Jackie Orme. You can see from the annual report that we have had a successful year.”
The spokesman also explained the reason behind Orme’s reduced pension contribution, saying: “It is simply an issue of pension accounting and the timings of payments into the defined-benefit scheme.”
