The chief executive of the Royal Institution of Chartered Surveyors (RICS) is under fire for accepting a six-figure bonus despite the body claiming government furlough money and making widespread redundancies last year.
A recently published remuneration report shows that Sean Tompkins was awarded £73,911 in January this year for the group’s 2019–20 plan and an additional £189,720 as part of the deferred element of the plan, payable in 2022.
Tompkins also received an annual salary for the year to the end of July 2020 of £254,341, a reduction of 2.1% compared to the previous year, after he took a 15% pay cut for a six-month period.
Since the outbreak of Covid-19, the 153-year-old institution has introduced swingeing cost-cutting measures, making more than 100 members of staff redundant. It also claimed taxpayer-funded furlough money for 30% of its UK staff during the pandemic.
Commenting on Tompkins’ bonus, one former RICS executive said: “It shines quite an unattractive light on the mismatch between the impact on ordinary people in the business and the reward provided to the chief executive. There is much made of his having sacrificed 15% of his basic remuneration for a short period but it’s been more than compensated for by his very generous bonus award.
“It’s enormously disappointing and shows a cavalier disregard for members’ concerns and even-handedness and fairness between senior leadership and the ordinary rank-and-file employees of the organisation.”
Neil Sinclair, chief executive of UK REIT Palace Capital, added: “It is ridiculous. Our position is very clear - we have taken no government money at all or furloughed anyone because we decided that if we did, there were certain things we couldn’t do. For him to make people redundant and accept furlough money and then take a bonus is a bit of a joke.”
Another senior real estate figure said: “It’s unbelievable. Their response might be that they have an independent remuneration committee, but that isn’t the point. They may think it’s fair but does he as a leader think it’s fair? Lots of CEOs of public companies have voluntarily taken big pay cuts. Does he really think this is the right thing to do in the year of a pandemic?”
Tompkins recently defended the institution’s pay scheme, telling Property Week in March: “At the end of the day, we protected the majority of our staff from any need of any pay cut or anything else. The senior people took pay cuts. Equally there is a balance here of incentivising people who are still delivering performance.”
However, the latest remuneration report has sparked anger and concern among some former senior RICS executives and current members, adding pressure on Tompkins at a time when he is already facing a wide range of criticisms about governance at the body.
Renewed criticism comes after a torrid few months for RICS, which has faced a governance crisis since The Sunday Times published allegations late last year that four directors were ousted in November 2019 for flagging a 2018 BDO report warning that RICS was exposed to “unidentified fraud, misappropriation of funds and misreporting of financial performance”.
An independent QC, Alison Levitt, has been commissioned to lead an independent review into the events that led to the dismissal of the four directors.
Alongside its independent investigation, RICS has also pledged to undertake a wider review looking at the “ongoing purpose and relevance of RICS in 2021 and beyond”, which is being overseen by chief executive Sean Tompkins and president Kathleen Fontana.
Responding to criticism over Tompkins’ bonus, a spokesperson for RICS said: “In 2019-20, which is the time period for this report, there was strong performance against most objectives; in addition, the renumeration committee was aware of significant achievements in pivoting the business and taking timely actions to maintain cash flow and successful operations. Any incentive payments remain subject to an affordability underpin which, despite the challenges created by Covid-19 was achieved in 2019-20. This is excluding any government support. With regards to the CEO and executives, performance objectives are set by management board at the beginning of each financial year.
“The committee did note the ongoing challenging business environment for RICS, that some of the workforce was furloughed, that a redundancy consultation was underway and that many member businesses have been significantly impacted. It also took into account Mercer’s updates on actual and expected variable pay outcomes in the market and updates from committee members with relevant sector experience in relation to the difficult decisions facing their businesses in relation to both base pay and incentives.
“Taking all this into consideration, the committee determined that it was appropriate and defensible to pay some element of the incentive. Any payments are at the discretion of the independently chaired and independently advised remuneration committee, which is made up of non-members (independent) and members of RICS and is advised by external experts Mercer.”
One of the non-executive directors (NEDs) of the Royal Institution of Chartered Surveyors (RICS) allegedly ousted for raising the alarm about a financial audit has called on the body to publish the findings of the independent review into the matter or risk ‘exacerbating the damage done’.
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