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Policy set to curb salaries of VCs

The education department has released a draft policy that university councils should use to determine the salary packages of vice-chancellors and senior managers — or face the threat of government intervention.

Councils set these salary packages, which have often been criticised for their exorbitance, but have failed to follow guidelines recommended by a study conducted in 2005 by education consultant Mamphela Ramphele.

Commissioned by the then South African Universities’ Vice-Chancellors’ Association — now Higher Education South Africa (Hesa) — the report was highly critical of the remuneration practices at universities. It said that although the sector consisted of institutions that vary considerably in size and complexity, the pay of vice-chancellors is almost ‘flat-lined” across the whole spectrum.

It proposed a new model for the remuneration of vice-chancellors and that Hesa should be responsible for regulating salaries within the sector. But Hesa and the councils failed to agree to the recommendations and some vice-chancellors continued to earn exorbitant salaries.

Last year the fed-up former minister of education, Naledi Pandor, warned that if the sector failed to regulate itself she would come up with her own plan. The new draft policy framework says that in June last year the results of a remuneration survey carried out by the department indicated little has changed: the levels of remuneration of many vice-chancellors remain inconsistent and unrelated to the size, performance or finances of an institution, as well as with good practices.

In response the policy recommends that the council of each university must have special committees to oversee the implementation of the new draft framework.

The members of these committees must have a sound knowledge of the King reports on corporate governance, legislation and regulations governing the higher education system, the 2005 Ramphele report as well as this policy and related documents.
These committees should make sure that the total cost of all senior staff salaries does not exceed 6% of the council-controlled recurring income.

According to the draft policy, the committees are accountable to the council with the following terms of reference:

  • To develop and recommend to the council an appropriate remuneration policy for the senior management of the institution;
  • To make recommendations to the councils on remuneration levels and annual increments in accordance with the size, shape, academic performance or finances of an institution, appropriate higher education market comparisons and their grading (staff are graded based on seniority);
  • To annually review the appropriateness of the manner in which the institutions determine the grading of posts and the pay attached to these posts;
  • To develop and put into action a credible performance-management system for senior management; and
  • To monitor the actual levels of senior management remuneration and any movement in these levels on a quarterly basis and report on these to the council.

According to the draft policy the bonuses of university bosses should be clearly linked to their individual performances as well as those of the institutions they are managing.

If the salary packages differ from this policy a clear plan must be put in place to bridge these differences with time-lines, the policy states.

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