1. Purpose
This policy sets out the principles and approach for determining the remuneration and severance arrangements for Senior Postholders (Level A staff) within the remit of Remuneration Committee . It helps ensure that decisions are fair, evidence-based, and consistent with the University’s strategic objectives.
The Remuneration Committee has formally adopted the Higher Education Senior Staff Remuneration Code, published by the Committee of University Chairs (CUC), and applies it in full. This also aligns with the requirement under the Office for Students (OfS) Accounts Direction for providers to have regard to the CUC Remuneration Code and its Guidance on decisions taken about severance payments in HEIs.
2. Scope
This policy applies to Senior Postholders (Level A) within the remit of Remuneration Committee, which includes the Vice-Chancellor, and any other roles determined by the governing body as within the remit of the Remuneration Committee. (A list of Senior Postholders within the remit of Remuneration Committee is shown in Appendix A. While the Clerk to the Governing Council is a ‘Senior Postholder’ within the University’s governance documents, their pay is not determined by the Remuneration Committee.)
3. Definitions
Pay Policy Framework: The University's overarching document setting out pay arrangements for all staff.
Senior Postholders: As defined within our constitutional documents.
4. Responsibilities
The Vice-Chancellor will make pay recommendations for all Senior Postholders within the scope of the Remuneration Committee’s Terms of Reference, informed where appropriate by relevant advice and information, including benchmarking data, provided by People Experience and Culture (PEC). The Vice-Chancellor will not make a recommendation in respect of their own pay. Where a recommendation relates to the Chief People Officer (CPO), the CPO does not have involvement in recommending or determining their own pay.
In accordance with our Pay Policy Framework, the following bodies hold the following responsibilities:
Governing Council: Ensures the provision for pay and grading arrangements across all staff. The Chair serves on the Remuneration Committee, while the Vice-Chair acts as its Chairperson.
Remuneration Committee: Holds decision-making authority for pay and rewards concerning Senior Postholders and has oversight for all staff earning over £100,000. The Committee is guided by the Committee of University Chairs (CUC) HE Senior Staff Remuneration Code and considers the broader remuneration landscape within and external to the university. Further details can be found in the Committee's Terms of Reference on the university's website.
5. Policy Statement
5.1 Operating Context
Executive pay setting in higher education operates within a challenging context. Universities must balance financial sustainability, value for money, and transparency with the need to recruit, reward, motivate and retain high-calibre individuals in a competitive national and international talent market. While operating with public and regulatory accountability, institutions must also compete with commercial sectors for leadership talent, often without access to comparable reward structures.
There is sustained public, political and regulatory interest in how universities remunerate their most senior staff. This includes heightened expectations for performance-based justification of pay, even in institutions, such as the University of Derby, that do not operate formal bonus schemes. The sector continues to evolve under increased financial pressure, and decisions on senior remuneration must be both justifiable and demonstrably aligned to institutional performance and value delivered.
5.2 Internal pay context below Senior Postholder level
Below the level of Senior Postholder, the University operates a range of pay and grading structures, supported by distinct pay bargaining arrangements appropriate to each staff group. These are set out in the University’s Pay Policy Framework and, in summary, include:
- A national pay spine and national bargaining arrangements for academic employees below senior and professorial level, with a normal expectation of annual progression through spinal column points (SCPs) up to the grade maximum;
- A local pay spine and local bargaining arrangements for professional services employees below senior level, with a similar expectation of annual progression through SCPs up to the Normal Performance Maximum (NPM) of the grade;
- Separate spot-salary grade ranges for leaders and professors, which are reviewed annually and may be adjusted to reflect relevant market benchmarks. Individual pay outcomes within these grades are normally informed by position in grade and individual performance. A Pay Review Matrix may be used to guide these decisions, incorporating a standard uplift for those below the NPM and a progression element to support fair movement through the grade.
The University participates in public sector pension schemes, including the Local Government Pension Scheme (LGPS) and the Teachers’ Pension Scheme (TPS). Staff can choose to opt out of these schemes and, if they wish, join a Defined Contribution (DC) scheme with a lower contribution rate.
5.3 Principles of Remuneration
Aligned with the CUC Remuneration Code, decisions on senior executive pay and severance must be:
- Fair, appropriate and justifiable: This means pay should reflect the responsibilities and expected contribution of the role, be free from bias, proportionate to performance, and sufficient to attract and retain talent. Decisions must also demonstrate value for money, with clear justification for any external income retention (the University’s External Income Policy is relevant to such considerations) or severance payments.
- Procedurally fair: This entails decisions being made by an independent, properly constituted Remuneration Committee applying consistent processes and evidence-based insights. No individual can be involved in deciding their own remuneration.
- Transparent and accountable: This means that decisions are underpinned by a clear rationale and, in respect of the Vice-Chancellor, disclosed through annual statements and reporting. In addition, the Remuneration Committee publishes an annual report that complies with the requirements of the CUC Code and OfS Accounts Direction.
5.4 Determining Senior Postholder Remuneration
5.4.1 On Appointment
Before a vacancy at Senior Postholder level is advertised, the Remuneration Committee will be asked to approve a pay mandate. Roles at this level are appointed on spot salaries rather than within defined pay scales, so a notional salary range - indicating minimum and maximum salary expectations - will normally be proposed for approval. Advertising will follow the principles set out in the University’s Pay Policy Framework.
Pay is reviewed annually on 1 August; however, this does not guarantee an increase. Senior Postholders whose pay has been set within the six months prior to this date will not normally receive an increase in that year and will usually be considered for any adjustment the following 1 August.
5.4.2 Annual Pay Review
Each year, the Remuneration Committee will consider pay for Senior Postholders (Level A), including the Vice-Chancellor, based on a clear understanding of institutional and sector pay context. This will be informed by an annual report (or more than one) prepared by People, Experience and Culture (PEC), which includes relevant benchmarking data, internal comparators, equality considerations, and the position on any general pay awards for staff outside the remit of Remuneration Committee.
The Committee will receive relevant information to support individual remuneration decisions, including assessed performance, appraisal outcomes, current base pay, and total reward package value. Members of the Remuneration Committee are expected to scrutinise and, where necessary, challenge performance assessments to ensure that pay decisions are fair, evidence-based, and equitable.
Where a ‘Pay Review Matrix’ is used to inform pay decisions for leadership and professorial roles below the level of Senior Postholder, it may also be used as a guideline to support decision-making at Senior Postholder level.
Remuneration decisions will be made with reference to the wider institutional pay framework, but national or local pay awards for other staff will not be applied automatically to Senior Postholders.
5.5 Benchmarking
Pay decisions for Senior Postholders (on appointment or as part of annual pay reviews) will normally be informed by relevant benchmarking data.
Benchmarking will draw on both higher education and, where relevant, wider market data. Benchmarking with universities will normally be based on analysis of similar roles in comparably-sized institutions.
A blended approach may be taken, using different sources depending on the role and context. While benchmarking provides important insight, it will not be used in isolation to determine pay. It will be considered alongside other factors, including individual performance, internal comparators, equality considerations, and the specific context of the role.
The total reward package - rather than base pay alone - will be taken into account when using external data. Monitoring against a relevant sector or industry median or midpoint is the usual approach, though a higher market position may be justified in specific circumstances, depending on institutional priorities, role demands, or talent market conditions.
In some cases, where there is clear market evidence of disparity, a retention payment or market supplement may be considered, in line with the University’s Pay Policy Framework. Benchmark data will be interpreted with care, taking account of institutional size, scope, and job responsibilities.
5.6 Performance Considerations
Pay progression for Senior Postholders is linked to demonstrable individual and institutional performance. The level of remuneration must be justifiable in relation to the value delivered in role, as required by the OfS Accounts Direction and reflected in the CUC Remuneration Code.
While the University does not operate a formal bonus scheme for Senior Postholders, non-cash recognition (e.g. tax-paid vouchers) may be used alongside salary review where appropriate as a recognition and reward mechanism.
The University expects:
- Clear annual performance objectives aligned to institutional priorities.
- An evidence-based assessment of outcomes.
- Remuneration Committee oversight to ensure performance assessments are fair, proportionate, and free from bias.
Where expected contribution is not achieved, this may result in no pay uplift or the use of performance management, depending on the circumstances and contractual terms. In such cases, consideration should be given to any personal circumstances that might have impacted on the individual’s ability to deliver in the review period (e.g. long term or substantial sickness absence, disability, maternity or other extended family leave) to ensure there is no unfair bias in the process. Similarly, there may be other factors outside of the individual’s control that may have contributed to under-performance.
5.7 Severance Arrangements
Remuneration Committee is responsible for approving severance payments in respect of Senior Postholders and any employee who earns in excess of £100,000 (with the exception of the Vice-Chancellor). The Remuneration Committee may propose severance packages in respect of the Vice-Chancellor for approval by the governing body.
Severance payments must be:
- Reasonable and justifiable.
- Based on statutory entitlements and any contractual obligations.
- Compliant with regulatory guidance and charitable obligations.
Enhancements may be considered only where justified (e.g. legal risk, significant service, efficiency) and must be reviewed for fairness, including EDI considerations.
It is important that severance payments should not result in reward, or risk being perceived as a reward, for poor performance, failure, dishonesty or inappropriate behaviour.
Any confidentiality clause within a settlement must not override the need for transparency and must allow for appropriate regulatory disclosure.
6. Policy Implementation
This policy was approved by the Remuneration Committee in July 2025 and took effect from 22 July 2025.
The policy will be reviewed annually via Remuneration Committee to ensure its continued relevance and compliance.
7. Related Documentation
8. References
9. Equality Analysis
This policy supports equitable treatment of all Senior Postholders and embeds principles of equity in remuneration decisions.
Appendix A: List of Senior Postholders within the Remit of Remuneration Committee
- Vice-Chancellor
- Deputy Vice-Chancellor
- Chief Operating Officer
- Provost - Innovation and Research
- Provost - Learning and Teaching
- Provost - Transformation (Temporary)
- PVC-Deans
- Chief People Officer
- Chief Financial Officer