The Charity Commission has singled out a charity’s decision to continue to pay its Chief Executive a bonus, despite reduced performance at the charity. While bonuses remain rare in the charities sector, the Commission has been increasing its criticism of bonuses and high pay for charity executives in recent months.
MSI Reproductive Choices, a charity providing support and healthcare services, has been singled out for criticism. In recent years, the Chief Executive, Simon Cooke, received bonuses totalling £217,000 in 2018, £124,000 in 2019 and £18,000 in 2020. This was in addition to his annual salary of £225,000. These bonuses continued to be awarded into 2020 despite a fall in fundraising from £308m to £294m and a reduction of more than 800 staff to 9,476.
According to MSI, the reduction in staff and fundraising was in response to several projects and funding cycles coming to an end, while the pandemic also had a negative financial impact on the charity. The reduction in Mr Cooke’s pay was, in part, determined by the charity’s failure to meet certain growth targets in 2020.
However, this is not the first time MSI has been on the Charity Commission’s radar. In December 2019, the Commission directed MSI’s trustees to review the factors which they take into account when deciding the Chief Executive’s pay and bonus package.
Helen Stephenson, the Chief Executive of the Charity Commission said at the time that the “Commission expects charities to set executive pay in a way that ultimately serves the charity’s beneficiaries into the future and demonstrates their special status as a charity”.
These comments reemphasise the point that bonuses for executives are rare in the charities sector, and that charities must not be run in a similar way as private or public companies, given their distinct legal status and special role in society. The Charity Commission clearly expects trustees to demonstrate how such bonuses will ultimately serve beneficiaries, with the likelihood that bonuses in charities should remain the exception rather than the rule.