Do chief executives earn their keep?


I am a volunteer speaker for Water Aid. I was impressed with this charity when I learned that it does not just hand out money ‘willy nilly’, in order to help poor societies get fresh water and better sanitation, it negotiates with governments and invests in local people and their companies do the work for themselves. They are then encouraged to take ownership of the equipment. Educating the people in how to behave responsibly to avoid illness is also part of their programme.

However, I couldn’t help agreeing with the growing number of people in this country who are now asking why chief executives are paid so much money – more money that we are ever likely to even hope to receive.

I was moved to approach the charity and ask how its Chief Executive earns her keep. To give them their due, instead of ignoring me – I had frequent responses to my emails and I was able to piece together the reasons for such a generous salary. (I think a lot of today’s problems are caused by the wrong people getting these top jobs.)

I re-wrote the information I was given to form this little explanation. I wonder if you agree with it. 

The Chief Executive of Water Aid, Barbara Frost, earns over £110,000 a year – as do most top executives in high-powered organizations. She earns this because she has knowledge, experience and negotiating abilities superior to the usual requirements of a director of a single company. She needs to be aware of the circumstances of a world-wide network of organizations including Australia, the USA, Japan, Sweden and Canada. 

She has personal knowledge of how organizations work – she worked in Malawi and Mozambique before she took on this position. She has been the Chief Executive of Water Aid since 2005. Her position is not for life – it is assessed on a yearly basis, as are other executives at Water Aid. She does not make decisions alone, she works with a board of trustees and together, they make decisions. The trustees have nothing to gain by being members – they are there voluntarily, they do not have a salary.

She has to travel frequently, which sounds ideal until you realize that she has little choice in the matter – she needs to go where she can make the most impact on behalf of Water Aid. She attends meetings where she can help initiate real change such as World Water Week in Stockholm. She has also presented to the United Nations General Assembly in New York. As well as monthly meetings with the Board, Barbara visits programmes in different countries to review progress and to keep abreast of the challenges they face. Back in the UK she leads a large number of planning and review sessions to ensure Water Aid is working efficiently and reaching as many communities as possible with sustainable services.

Barbara has proved herself worthy of her job. Her leadership has managed to extend Water Aid’s help from 15 to 27 of the poorest countries. She has increased Water Aid’s annual income from £26.9 million to over £60 million (little compared to her own salary). This has provided the means to reach more communities than ever with safe water, improved sanitation and better hygiene education – the core principles of Water Aid’s role as a charity. 

Rosemary Westwell

(volunteer speaker for Water Aid email: rjwestwell@hotmail.com)

 

Advertisements

Tags: , ,

4 Responses to “Do chief executives earn their keep?”

  1. Bob Picking Says:

    I don’t feel inclined to donate a monthly amount as requested on TV to keep a CEO in a salary of £110,000pa and I am sure most people would agree with me

    • rjwestwell Says:

      I quite see your point. This was exactly how I felt before I became more involved. The CEO’s salary sounds outrageous at first sight – but on reflection, one of the main problems with people being without fresh water, sanitation and health education in the third world is the lack of will or even corruption of their governments who need to be persuaded to change. It is only at the highest levels of political meetings that we have some way of influencing them and persuading them to change their attitude. Thus the CEO needs to get involved in top-level meetings, to ‘rub shoulders’ with the powerful – many of whom have gained power through wealth – to persuade them to do the right thing. I’m quite sure I couldn’t cope with her schedule, the trips worldwide to places one would not normally choose to holiday, the jet lag, talking to people I would not normally choose to be friends with and so much responsibility. The CEO needs a decent salary to be able to cope with all of this. It’s when a CEO doesn’t work as hard as Water Aid’s that their salary becomes way out of proportion. It will be interesting to see if Water Aid reaches the target that it plans – clean water and sanitation for the whole world by 2030.

    • Matt Says:

      Rest assured Bob, it’s not your donation that will keep Barbara in her position as CEO. As the article explains, her position is reviewed annually against performance targets by an independent board. Being at the top of any organisation for 10 years is quite an achievement, yet alone one that does the kind of work WaterAid does with the general success it has had. In her time there she has lead the effort in increasing WaterAid’s revenue by over £2 million/year every year alone. I’ve known street fundraisers work on a lot more than 5% commission (not saying this is what her figure literally represents, just by way of example). This doesn’t include the increase in effectiveness of aid that only a life long commitment to the cause can bring.

      I personally feel that the idea that CEOs of charities should work for very little is simply unsustainable. If Barbara is able to have the kind of success she has had in this industry, imagine how much she could have made in finance, or literally any other sector for that matter. Only the truly corrupt get in to International Development for the money and I sincerely doubt she’s one of them!

      £110k is a significant amount of money, but I for one have personal experience of people in the public sector earning this kind of figure with much less skill, responsibility and success. This site shows average CEO salaries:

      (http://www.payscale.com/research/UK/Job=Chief_Executive_Officer_(CEO)/Salary).

      (Worth bearing in mind that few if any of the CEOs earning the average of £100k are running an organisation with revenue of £60 million/year or have been successfully doing this for 10 years)

      I feel like I should add I have no affiliation with WaterAid or Barbara but do have experience of the ID sector among others. I also don’t mean to discourage people discussing this issue but think Bob needs to elaborate on his opinions surrounding this complex issue.

  2. Pete Says:

    Utter disgraceful… £110k a year running charity! That is almost 10k each month… Nobody can justify this… Africa is not a poor region it has been constantly raped of resources over time… Charities like this enforce the vision that people of Africa have nothing and need the help of the “west”. For every £1 donated how much of this goes direct to the child who really need it. People do your research Sierra Leone is one of the richest places in the world in regards to resources yet it’s always involved in war…. I wonder why (regular international intervention).

    If she really wanted to prove her wealth why not work a ‘normal’ job and give her resources for free. I do charity work… But would never expect to be paid for it as it would totally defeat the point.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: