Source: Financial Times
By Jonathan Moules,
François Ortalo-Magné’s £500,000 package is 11% more than that of his predecessor
London Business School has upset some senior faculty staff by paying its dean £501,000, 11 per cent more than his predecessor.
François Ortalo-Magné, who moved from Wisconsin School of Business in the US to take over as the head of LBS in August 2017, secured a pay package larger than many university heads in the UK.
The figure, contained in the school’s annual financial statement, will fuel concern about university heads following the lead of company chief executives in ratcheting up their pay.
It beat the £433,000 paid to Alice Gast, president of Imperial College, and the £444,000 Sir David Eastwood, vice-chancellor at the University of Birmingham, received. Both of these academic heads are responsible for the entire range of subject departments at their institutions, not just the business school.
One senior faculty member said he would be happy to pay £1m if the dean could prove his value to the school, but felt that little had been achieved in terms of additional funding for the school during his first year in office.
Under the previous dean, Andrew Likierman, LBS raised £125m for new scholarships and additional teaching facilities, its first major fundraising since it was founded 50 years ago. This year LBS was number four in the Financial Times’s global ranking of MBA courses, unchanged from its position in 2017.
The biggest increase in Mr Ortalo-Magné’s pay was the £76,000 contribution to his pension, compared with the £10,000 paid to Sir Andrew. This was because Mr Ortalo-Magné is a member of the Universities Superannuation Scheme, a Liverpool-based pension programme, and Sir Andrew was not, LBS said.
Mr Ortalo-Magné’s salary figure does not include accommodation provided to the dean on the LBS campus overlooking Regents Park. This is a non-taxable benefit and it would not otherwise be possible to rent out the property, according to LBS.
“The underlying base salary is broadly in line [with peers] and subject to inflation, and his remuneration package is benchmarked in line with our competitors,” the school said.
Business school faculty can secure significantly higher pay packages than their counterparts in other parts of universities. Out of the 801 LBS employees, 122 are paid £100,000 and 14 receive £300,000 or more, according to the published figures.
“I think that it is fine to pay a lot to attract the right person,” another senior faculty member said, “but it is not clear that the market is justifying a package of just over £500,000.”
Like-for-like comparisons between business school deans are hard in the UK because most of the institutions are contained within universities, not standalone institutions like LBS, and so do not have to publish separate annual accounts.