UK: CUC publishes draft Higher Education Remuneration Code

The Committee of University Chairs has published for comment a draft remuneration code: see here. It seems uncharitable to say that the Code appears to have been produced somewhat hastily. In places there are missing words and/or typographical errors and the general tenor appears somewhat defensive of the status quo.  The structure of the Code is not particularly helpful and what an institution needs to do in order to claim compliance with the Code is set low. This said, it is not clear if the explanatory notes accompanying the Code are part of the Code for compliance purposes (the notes are said to "support" the Code). These notes are more extensive than the Code itself and contain much of the detail covered in media reports (see here for example).

One aspect of the Code is striking given the changes that were made several years ago to the UK's Corporate Governance Code in respect of remuneration. The CUC's draft Code states that remuneration should be "sufficient to recruit, retain and motivate staff of appropriate calibre in the context of the market for that role, balanced with the need to demonstrate the achievement of value for money in the use of resources" (para. 21).  The first part of this quotation - with its emphasis on recruitment, retention and motivation - mirrors closely what was one of the Main Principles in the 2012 edition of the UK Corporate Governance Code (here, pdf). But in the 2014 edition of the Code (here, pdf) the references to recruitment, retention and motivation were removed and the Principle amended to stress that remuneration should be designed to promote the long-term success of the company. The FRC made this change because it wanted to make clear that remuneration policies should be designed to achieve long-term benefit for companies rather than short-term benefits for management (see here, pdf).