Annual report and accounts 2018/19

Remuneration report

Chief Executive, Chief Officer and other senior appointments

During the 2018/19 financial year the structure of the PSAA management team changed in response to the changes in PSAA’s responsibilities as the company migrates from its former transitional functions to its new appointing person role. The Chief Officer and two senior managers were made redundant and a new Chief Executive was recruited.

Staffing structure

We carried out a significant restructuring and cost reduction exercise to ensure that PSAA is fit for purpose for its new responsibilities and objectives. This programme of work was completed during 2018, resulting in reduced staff numbers and reduced operating costs and the establishment of a team whose skills and experience are aligned with the company’s new remit.

Our overall staffing establishment has reduced from 12 to 6, and as a result our annual staff costs will reduce from £0.95m to £0.58m.

During the year, as a result of restructuring, we incurred significant redundancy costs which are included in the tables below. Funding to meet the redundancy entitlements up to 31 March 2015 was provided from an earmarked reserve transferred to PSAA from the Audit Commission. We also reviewed terms and conditions of employment and this led to some further costs of change (£34.7k) associated with ‘buying out’ previous contractual entitlements which the company considers are no longer relevant to staff roles.

Remuneration policy for the Chief Executive, Chief Officer and senior staff

For all senior staff, remuneration was set by the PSAA Board, in line with PSAA’s terms and conditions of employment.

Key terms of employment for the Chief Executive, Chief Officer and other members of the management team were as follows:

  • pension arrangement: PSAA operates a defined contribution plan with the same level of benefit for all its members. The Chief Executive, Chief Officer and all staff were eligible to join the scheme. PSAA’s contribution is 10% of salary for all staff.
  • other terms of employment: the Chief Executive, Chief Officer and senior managers all had permanent employment contracts. The Chief Executive and senior managers are required to give between four to six months’ notice if they resign.
Remuneration over £50,000

The number of staff with remuneration over £50,000 is shown in the table below. The bands are based on salary, employer pension contributions and contractual payments and benefits in line with the contractual terms and conditions of employment

Band £k Number of employees 2019 Number of employees 2018
55 – 60 1
60 – 65 1
65 – 70 1
70 – 75 1
75 – 80 *1
80 – 85 **1
85 – 90 *3
95 – 100 1
100 – 105 ***3 1
110 – 115 **1
135 – 140 1
140 – 145 *1
170 – 175 *1
185 – 190 *1
210 – 215 *1

* Includes employees who received contractual redundancy payments (see also table under ‘contractual redundancy payments’ below).
** Includes a payment of between £9,800 and £12,460, to the employee to ‘buy out’ previous contractual entitlement to a London travel card, following a review of terms and conditions.
*** Includes two employees who received contractual redundancy payments (see also table under ‘contractual redundancy payments’ below) and one employee who received a payment to ‘buy-out’ previous contractual entitlement to a London travel card as described above.

Contractual redundancy payments

The table above shows remuneration including contractual redundancy payments. These payments are made in accordance with terms and conditions of employment. The redundancy payments are shown separately in the table below.

Band £k Number of employees 2019 Number of employees 2018
45 – 50 1
50 – 55 1
55 – 60 1
75 – 80 1
90 – 95 1
115 – 120 1
125 – 130 1
135 – 140 1
Senior management remuneration

Remuneration details for the senior management team are shown in the table below. This includes salary, employer pension contributions and contractual allowances and benefits in line with the contractual terms and conditions of employment.

Description 2019 2018
Chief Officer *£142,973 £139,086
Chief Executive **£55,372
Chief Finance Officer ***£113,926 £102,013
3 Other Senior Managers – range ***£103,949 to *£214,580 £89,744 to £98,078

* Includes a contractual redundancy payment (see also table under ‘contractual redundancy payments’ above).
** Recruited during 2018, had part-year service.
*** Includes a payment to ‘buy-out’ previous contractual entitlement to a London travel card.

Pay multiple

The relationship between the remuneration of the highest paid employee and the median remuneration of the organisation’s workforce is shown in the table below. Total remuneration includes salary, contractual payments and benefits. PSAA does not have performance-related pay. These figures do not include employer pension contributions.

Description 2019 (including redundancy pay) – £ 2019 (excluding redundancy pay) – £ 2018 – £
Band of highest paid – total remuneration *205k – 210k 105k – 110k 125k – 130k
Median – total remuneration 101k 51k 65k
Ratio 2.1 2.1 2.0

* Total remuneration includes salary and redundancy pay. The figures excluding redundancy pay would be as follows: band of highest paid £105k – £110k, median £51k and ratio 2.1.

Remuneration policy for Directors

There have been no changes to Directors’ remuneration during the year.

None of the Directors serving between 1 April 2018 and 31 March 2019 received other benefits from PSAA, nor were they members of the pension scheme.

Director 2019 – £000 £2018 – £000
Stephen Freer 30 30
Clive Grace 8 8
Stephen Sellers 8 8
Keith House(1) 8 3
Caroline Gardner (2) 0 0

(1) In 2018 Keith House worked part year as he was appointed on 1st December 2017.
(2)Audit Scotland does not charge PSAA for Caroline Gardner’s services.

Directors are also reimbursed for expenses directly and necessarily incurred in the performance of their duties.

In addition, the independent audit committee member, Kathryn Cearns, received remuneration of £2,000 per year.

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