Sunday, November 28, 2010

Does CIPD CEO deserve £87K bonus? Personnel Today survey NO 94%, YES 6%!

Personnel Today picked up on my Jackie Orme story and laid out the case with a link to my blog along with an official response from the CIPD.

"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….. That level of detail is between the remuneration committee and Jackie Orme.”

Let me translate: ‘It’s none of your business. We decide and that’s that!’

Listen, we all understand that the Remuneration Committee technically decides on these things, but it is not enough to simply state you’ve had a successful year with not a single word of support, especially as the stated facts suggest the opposite.

You can see from the annual report that the CIPD have had an annus horrbilis:

Jackie Orme’s bonus up by 49% to £87,000, BUT:

  1. Commercial income down by 23%
  2. Research down by 57% and ridiculed (report pulled and CEO apology)
  3. Magazine imploded (down 83%)
  4. Revenues from the branches down by 45.6%,
  5. Investment returns bombed (down 74.7%)
  6. And don’t forget that there was also a dramatic 50% increase in the number of staff on £60k plus from 14 in 2009 to 21 in 2010.

Devastating survey

The comments on the Personnel Today website were mostly negative, so they launched a survey. These are the results so far:

Do you think the CIPD’s performance in 2009-10 justifies CEO Jackie Orme’s bonus?
So far YES 6%, NO 94%

The poll ends on December 7th, so get your vote in now.

An overwhelming rebuke I’d say.

Credibility at stake

But there’s a wider issue at stake here, which is the very credibility of the CIPD. By failing to explain the £400k salary, and in particular the huge increase in her bonus to £87,000, the CIPD are in no position to offer advice and guidance on pay to others.

Their paper on bonuses on the public sector (recommending them strongly) was seen by many as a rather odd and idiosyncratic message in these times of austerity, especially as it was published close to the disastrous ‘Quango’ paper, attacking organisations that weren’t quangos, but charities, just like the CIPD. The paper had to be pulled and an apology issued by Jackie Orme, when the CEOs of those charities rounded on the CIPD for their amateurism.

If the CIPD was a large organisation with a large number of employees, I’d have some sympathy with a total package of £400k, but it is a charity and technically a SME, as it has less than 250 employees. Jackie Orme, in accepted this package from a weak remuneration committee of just three board members.

New President’s murky past

Let me add another warning. Gill Rider, the incoming President, was the Head of HR across Whitehall. To put it another way, Head of Civil Service Capability Group (widely seen as inefficient and incapable) and Head of Profession for Civil Service HR, widely criticised as being responsible for the excessive salaries and bonuses for top Civil Servants. You may not know much about Gill Rider, but she was subject to a severe mauling from the press after the government awarded a £400 million contract to De La Rue Printers for passports. Turns out she’s a Director of de La Rue, and although resigned briefly, returned as a Director the very day the contract was awarded. She was also accused of nepotism by appointing colleagues of hers to top Government posts. The whole murky story is here. The CIPD is turning into a second-rate dictatorship lurching from one incompetent leader to another.


Anonymous said...

Hi Donald

I really believe that in Business Private or Public we should all be prepared to stand up and be counted. I have, for more years than I care to admit, been active within CIPD.

In the last 3 years the Institute does indeed, as you suggest, appear to be run more as a 'Dictatorship'. I believe that several well regarded members have sought to challenge various matters and are being marginalised.

Issues such as salary and bonus, the Bridge Partnership, the lowering of entry requirements and the recent gaffs in the press.

The original blog article summarises things pretty well – If I were the CEO I would have been mad about this!! However the £400k lifestyle continues without moderation, lush BMW's free Dinners etc etc..

Her responses to CIPD folks appears to be curt and abrupt for a CEO - that is pretty rude in my eyes.

I do wonder if the wider membership and the media are aware about the growing dissatisfaction with her leadership and Pay.

Donald Clark said...

They may not have before, but they will now. Thanks for your contribution from the 'inside'.

Garry Platt said...

She's up to a whopping 7% YES 93% NO now (11:37, 30/11). Which judging by the way CIPD interprets figures is probably viewed as a glowing endorsement.

Donald Clark said...

An'insider' told me that the whole of the Board were told to vote for her - that's 16 - that accounts for almost the entire YES vote!

Anonymous said...

I'm not a CIPD member although my partner (domestic variety) is so I hear something of this. One aspect no one's touched on is the fact that many (I don't know the %) of CIPD members will be in the public, voluntary and higher education sectors where budgets, salaries and jobs are all under severe pressure (e.g. council CEO salaries are actually falling). It is hugely insensitive to go on living the style of the past when many members are in those challenging circumstances.

One of your other commentators says "If I were the CEO I would have been mad about this!!" If she is perhaps she needs to be reminded of the difference between on the one hand a large listed company where money can be raised on the markets and success is measured through profits, and on the other hand a membership organisation where income comes directly from members' pockets.

Donald Clark said...

This is a key point. What are the comparators here? This is a trade association of sorts run for the benefit of its members. Of all the organisations in the UK its the CIPD that should be setting the standard, not descending into a posture of secrecy and rewards that are in inverse proportion to performance. There are many good people working hard in HR and some good people in HQ - but it's the old case of lions led by donkeys (in this case a Golden Ass).