Remuneration Committee Annual Report 2024/25

Remuneration Policy

The Remuneration Committee determines the remuneration of the President and Vice-Chancellor, as well as the remuneration of other senior post holders, as defined in the Committee’s terms of reference. The Committee also has oversight of the remuneration arrangements for other senior members of staff, including members of our professoriate and senior professional services staff.

See the full Terms of Reference of the Remuneration Committee for more information. 

Executive Remuneration Principles

In determining the remuneration of the President and Vice-Chancellor and senior post holders, Remuneration Committee apply the following principles and approaches:

• Remuneration decisions should balance the need to attract, retain, motivate and reward high quality leaders in a competitive international environment with the need to demonstrate sustainable, effective and proportionate use of resources in the context of student, staff and public expectations.
• There should be clear distinction between inflation-related, performance-related and market-related remuneration decisions.
  Note 1: It is for the Remuneration Committee to determine application of an inflationary uplift, which will normally be made in line with the corresponding UCEA or NHS annual pay uplift applicable to other University employees. Performance-related remuneration decisions recognise sustained performance through salary. The University does not operate a contractual performance-related bonus scheme for members of University Executive Board
• Remuneration decisions should be considered with reference to a range of qualitative and quantitative supporting information, including:
  • Individual and institutional performance data, including appraisal outcomes and University key performance indicators.
    Note 2: Senior post holders in the University participate in the same appraisal arrangements as other employees at Level 4 and above, with contribution assessed with reference to agreed expectations and objectives. The University’s key performance indicators are themed according to the core principles and goals set out in the University Strategy and incorporate measures of student satisfaction and career prospects, staff engagement, financial sustainability, research quality, entry standards, international reputation and league table rankings.
  • Market pay benchmarking data, with particular reference to the median remuneration of equivalent or comparable roles within the Russell Group, and especially those in universities of similar size and complexity to Southampton.
    Note 3: The UCEA Senior Staff Remuneration Survey is the primary source of market pay data used by the Remuneration Committee, with this supplemented by data from other sources, including the annual CUC survey of Vice Chancellors’ remuneration, HESA salary data, commercial benchmarking data and specifically-commissioned reviews and reports, where required.
  • Internal pay benchmarking data, with particular reference to the pay settlements, incremental pay progression, pension schemes and other benefits applicable or available to other University of Southampton employees.
  • The remuneration levels of senior staff in partner employers, notably the National Health Service.
    Note 4: Many of our highest-paid staff are clinicians, paid at salary levels determined by the NHS, not by the University.
  • Matters of equality, diversity and inclusion.
  • Job evaluation data, particularly in establishing the relative complexity and value of new or revised roles.
    Note 5: The University uses the Korn Ferry/Hay job evaluation methodology for roles at all levels.
  • Data on the recruitment and retention of senior staff.
• Remuneration decisions should focus on the value delivered by individuals acting within their executive roles. This does not preclude individuals from pursuing activities beyond the scope of their executive role, but any such activities should not be detrimental to the conduct of their executive role, and will not be the focus of executive remuneration decisions.
• In accordance with the Ordinances of the University, some executive roles are appointed on a permanent basis, whist others are appointed on a time-limited basis. Executive remuneration should be structured accordingly and be time-bound where appropriate.

Other Remuneration and the Reimbursement of Business Expenses

The University’s Consultancy Policy sets out the University’s policy on the retention of income generated through external engagements. This policy applies to all employees, including those within the remit of the Remuneration Committee.

The University’s Expenses and Benefits Manual sets out the University’s policy on the reimbursement of business expenses. This policy applies to all employees, including those within the remit of the Remuneration Committee.

Membership, Attendance and Activity of the Remuneration Committee

The members of the Remuneration Committee are all lay members of the University’s governing body, Council, and are independent of University management. Membership comprises the Chair of Council, the Vice-Chair of Council (who is the Chair of the Remuneration Committee), the Treasurer and two other lay members of Council.

All members of the Remuneration Committee are appointed by the Nominations Committee (whose Terms of Reference are publicly available here) with a focus on ensuring an appropriate balance of relevant skills, experience and competencies. Where necessary, additional expert advice and guidance is sought to inform the Committee’s decision making.

The Committee met three times between 1 August 2024 and 31 July 2025 and corresponded on matters relevant to the Committee on a number of occasions between meetings. Membership and attendance at meetings during this period was as follows:

In accordance with the Terms of Reference of the Remuneration Committee, the Chair of the Committee may invite other attendees as appropriate, subject to the proviso that no attendee is ever present for any agenda item that concerns their own remuneration, or which for some other reason would cause a conflict of interest. Other attendees during the year were as follows:

• The President and Vice-Chancellor, who attended a part of one meeting by invitation to provide commentary and answer queries from the Committee in relation to the pay recommendations made by him for senior post holders. He was not present for any discussion relating to his own remuneration.
• The Executive Director of Human Resources, who attended all three meetings to provide advice and guidance to the Committee. She was not present for any discussion relating to her own remuneration.
• The Head of Reward, Recognition and Inclusion, who attended all three meetings as secretary to the Committee, and to provide advice and guidance.

Meeting 1: 18 November 2024

The Committee received a report setting out recommendations for the remuneration of Senior Post Holders. These recommendations were presented alongside supporting information including appraisal outcomes, the University’s Executive Remuneration Principles, contextual pay information – particularly the pay uplifts applicable to other University employees – and details of the current remuneration and benchmarking position of each of those under consideration.

The Chair had invited the President and Vice-Chancellor to attend this part of the meeting only, allowing him to provide a commentary to accompany the pay recommendations, and to answer queries from the Committee in relation to those recommendations. The Presidentand Vice-Chancellor then left the meeting.

Following detailed discussion of each proposal, the Committee agreed outcomes which resulted in mean increases of 1.8% for Senior Post Holders, in addition to the application of the two-stage cost-of-living uplift during the year, which would be worth 2.5% in total. The overall mean uplift for Senior Post Holders during the year was therefore 4.4%, which compared with an equivalent figure of 4.2% for the average University-graded employee.

The Committee then reviewed the pay of the President and Vice-Chancellor, taking into consideration the University’s executive remuneration principles and a comprehensive range of comparator data and contextual information to inform discussion and decision-making.

The Chair of Council reported to the Committee on the process and outcomes of the President and Vice-Chancellor’s appraisal, as well as a range of relevant University performance indicators, which demonstrated continued strong performance, especially in the context of sector-wide student number and financial pressures.

The Committee discussed, at length, a fair and appropriate remuneration outcome for the President and Vice-Chancellor, stressing the importance of ensuring due recognition of continued high performance, both individually, and relative to peers, whilst being mindful of the wider context of pay – and particularly the pay increases applicable to other University employees during the year – and the sensitivities surrounding Vice-Chancellor remuneration.

At the conclusion of these discussions, the Committee agreed that the President and Vice-Chancellor’s salary should increase by 2.0% with effect from 1 December 2024 to recognise continued excellent performance.

In other business, the Committee:

• The Committee reviewed a summary of all severance cases effective during the 2023/24 financial year.
• Reviewed the final draft Remuneration Committee Annual Report for 2023/24, making only minor corrections, before endorsing the report for submission to Council for approval and subsequent publication alongside the University’s 2023/24 financial statements.
• Considered a report providing initial findings from an in-depth analysis of gender pay gaps at Level 7, ahead of a full discussion at the March 2025 meeting.

Meeting 2: 3 March 2025

The Committee focused the majority of its time considering a detailed analysis of pay gaps at Level 7, based on analysis and a presentation by the Head of Reward, Recognition and Inclusion, following initial findings presented to the Committee in November 2024.

Analysis had focused on establishing how long each person at Level 7 had been a professor (or equivalent), including in employment prior to the University of Southampton. This had been done to help give a better understanding of the relative pay position of members of the professoriate.

The new analysis showed that pay outcomes were fundamentally equitable by gender and ethnicity, albeit with a general pattern of men being appointed on slightly higher salaries but then progressing more slowly than women, on average. Overall, women tended to have slightly higher salaries than men, relative to the length of time they’d been a professor. There was greater variation (and statistical uncertainty) by ethnicity, with minority ethnicity women tending to have the highest salaries relative to the length of time they’d been a professor, and minority ethnicity men tending to have the lowest salaries.

A small number of high and low outlier salaries (less than 20 out of a population of over 650) were highlighted and discussed in more detail. Each had a reasonable justification in isolation but, overall, these outliers consistently favoured men.

The Committee welcomed the additional insight provided by the new analysis and the assurance that it provided that pay outcomes were fundamentally equitable by gender and ethnicity. There followed a discussion about how to continue to understand and share best practice through recruitment so that individual decisions could be made with greater awareness of the wider trends and impacts on pay gaps and pay equality. The Committee requested that these data and insights were shared with relevant senior stakeholders, and that any feedback be shared with the Committee in due course.

In other business, the Committee:

• Received an update on sector pay awards, and the outlook for national pay bargaining.
• Received an update on the status of senior appointments to the University’s new Delhi Campus. Offers of appointment had recently been made and accepted for the roles of Academic Provost and Director of Teaching and Learning.

Meeting 3: 7 July 2025

The Committee:

• Received a brief summary of the annual CUC meeting of Remuneration Committee Chairs, which had taken place on 30 April 2025.
• Received a routine update on pay benchmarking for senior post holders.
• Considered and approved pay parameters for the appointment of the next Dean of Medicine, with the current Dean’s term of office ending on 31 August 2026 and recruitment activity about to commence.
• Conducted its annual review of its terms of reference. No amendments were made.

Remuneration of the President and Vice-Chancellor

During the year covered by this report, Remuneration Committee approved a £900 increase to the President and Vice-Chancellor’s salary, from £342,362 to £343,262, with effect from 1 August 2024 as the first stage of the 2024/25 national pay settlement was applied, consistent with the treatment of other University employees. The Committee then agreed a further 2.0% performance-related increase to salary (to £350,127), with effect from 1 December 2024 – as described in the summary of the 18 November 2024 meeting of Remuneration Committee. The second stage of the 2024/25 national pay settlement was then applied with effect from 1 March 2025 – also consistent with the treatment of other University employees – increasing salary to £357,958.

Overall, this meant that Professor Smith received £351,102 in salary between 1 August 2024 and 31 July 2025.

Professor Smith elected to purchase additional holiday during the year, resulting in deductions from his salary of £7,857.

Professor Smith is a member of the Universities Superannuation Scheme (USS) with the USS Voluntary Salary Cap in place, limiting the accrual of pension benefits to part of his salary. He receives a supplement in lieu of pension, which amounted to £26,610 for the period from 1 August 2024 to 31 July 2025, in respect of the non-pensionable part of his salary. The University made the required employer pension contributions of £12,325 during the year.

In common with other senior post holders, the University provided Professor Smith with single membership of a healthcare scheme to help ensure his availability for work, at a cost of £1,397 for the period from 1 August 2024 to 31 July 2025.

For the better performance of his official duties, and as required by contract, Professor Smith lived at the Vice-Chancellor’s official residence in Southampton whilst serving as President and Vice-Chancellor. The residence is used regularly for University meetings and official functions. These living arrangements incurred a taxable benefit of £5,586 in 2024/25 and a non-taxable benefit of £7,842 based on market rental prices.

In the period from 1 August 2024 to 31 July 2025, Professor Smith’s total remuneration was 8.3 times higher than the median total remuneration of all University employees (£47,833 per annum) and 9.8 times higher than the median total remuneration of all University staff, including casual workers (£40,527 per annum).

For the same period, Professor Smith’s basic salary was 8.4 times higher than the median basic salary of all University employees (£41,851 per annum) and 9.8 times higher than the median basic salary of all University staff, including casual workers (£35,984 per annum).

Remuneration Committee will continue to update Council on a regular basis throughout the year and will publish this Annual Report at the beginning of December each year.

Remuneration Committee

Southampton

17 November 2025

Annex 1: Terms of Reference of Remuneration Committee

Origin

Remuneration Committee is a sub-committee of Council.

Remuneration Committee is constituted in accordance with requirements of The Higher Education Senior Staff Remuneration Code.

Purpose

The purpose of Remuneration Committee (‘the Committee’) is to ensure the proper remuneration of the University’s senior post holders, as well as to have oversight of remuneration arrangements for other senior members of staff.

For these purposes, the following definitions are applied:

• ‘Senior post holders’ means incumbents of the roles listed in Schedule 1
• ‘Other senior members of staff’ means (apart from those already included as ‘Senior post holders’):
  • Named Office holders as listed in Schedule 2.
  • Level 7 employees; and
  • Any other employee paid a basic salary of £100,000 or more per annum.

Responsibilities and activity

The Committee shall:

1. Determine the remuneration of the President and Vice-Chancellor.
2. Determine the policy by which the remuneration of other senior post holders is set.
3. Review and approve the remuneration of other senior post holders on receipt of recommendations from the President and Vice-Chancellor or their nominee.
4. Approve the principles by which the remuneration of Named Office holders is set.
5. Approve the principles by which the remuneration of Level 7 employees is set.
6. Monitor the remuneration processes applying to Named Office holders, Level 7 employees and any other employee paid a basic salary of £100,000 or more per annum.
7. Review and approve severance arrangements for senior post holders, Named Office holders and any other employee paid a basic salary of £100,000 or more per annum.

In discharging its responsibilities. the Committee will:

1. Consider the context in which the University operates.
2. Consider senior remuneration in the context of remuneration for all staff.
3. Consider benchmarking data as relevant to these Terms of Reference.
4. Consider equality, diversity and inclusion data as relevant to these Terms of Reference.
5. Ensure that any equality impacts are considered as part of decision-making processes.
6. Consider the public interest and the safeguarding of public funds alongside the interests of the institution when considering all forms of payment, reward and severance to the staff within its remit.
7. Ensure the body is fit for purpose by performing an effectiveness review every three years.

Reporting arrangements

The Committee will provide an annual report to Council on the conduct of its business.

The Committee will provide a publicly available annual report on the conduct of its business.

Constitution

The Committee shall comprise:

• The Chair of Council
• The Vice-Chair of Council
• The Treasurer
• Two lay members of Council

The Vice-Chair of Council will normally be the Chair of the Committee. In the event that the Chair of Council is Chair of the Committee, they may not chair any discussion in relation to item i. of these Terms of Reference.

Other attendees:

• The Committee shall be supported by the Executive Director of Human Resources or their nominee, who shall provide or arrange provision of appropriate advice and guidance to the Committee, and act as secretary to the Committee.
• The Chair of the Committee may invite other attendees as appropriate.
• No attendee will be present for any agenda item which concerns their own remuneration or which for some other reason would cause a conflict of interest.

Quorum and frequency

Quorum:

• Quoracy is a minimum attendance of 1/3 of the membership plus one person, one of whom must be the Chair or Vice-Chair of Council.

Frequency of meetings

• The Committee shall meet with such frequency and at such times as it may determine.

Resources

Secretariat support shall be supported by the Executive Director of Human Resources or their nominee.

Terms of Reference review

Date of last review: 15 July 2025 (with effect 1 August 2025)

Date of next review: July 2026

Schedule 1

Senior post holders:

At the University of Southampton

• President and Vice-Chancellor
• Senior Vice-President (Academic)
• Vice-President (Education and Student Experience)
• Vice-President (International and Engagement)
• Vice-President (Operations)
• Vice-President (Research and Enterprise)
• Deputy Vice-President (Operations)
• Dean of the Faculty of Arts and Humanities
• Dean of the Faculty of Engineering and Physical Sciences
• Dean of the Faculty of Environmental and Life Sciences
• Dean of the Faculty of Medicine
• Dean of the Faculty of Social Sciences
• Executive Director, Finance and Planning
• Executive Director, Human Resources
• Executive Director, Estates and Facilities
• Chief of Staff and Chief Strategy Officer

At our international campuses

• Academic Provost, University of Southampton Delhi
• Academic Provost, University of Southampton Malaysia

Schedule 2

Named Office holders are the incumbents of the following roles:

• Heads of School
• Associate Deans
• Associate Vice-Presidents
• Directors of the University’s Strategic Interdisciplinary Research Institutes
• Roles of equivalent seniority at our international campuses