Sue Gray and the fascinating question of higher pay for “subordinates”

The recent stories around the pay of special advisor Sue Gray (now former Chief of Staff for the Labour party) were partly characterised by a number of commentators expressing apparent shock that someone within an enterprise was paid more than the leader of that enterprise.

The implication was that there was a natural “rule of organisations” that if you are the “top person” you should be paid the most (although how much that might be is a matter for a future article).

However, as experienced remuneration advisors, we would always urge our clients to challenge this notion as being an automatic axiom.

One obvious situation where someone other than the head of the organisation might receive a  larger amount of total compensation (not just salary) is in respect of the top salespeople within a business – whether this is a designated sales team or, for example, a senior partner within a professional services firm – the fact that an individual might receive more money than “the boss” should not be a reason to make adjustments to pay structures.

We would note that, in both above examples, it is almost certain that the top individual in the business will have a higher base salary – with the overall package for the “subordinate” being higher because the individual in question receives more variable pay, based on actual performance (which might therefore be lower in years where performance dips).

Occasionally, we do see situations whereby someone other than the most senior individual has a higher salary – typically where that individual is also in the “C-Suite” and has a rare or specialist talent, cultivated over a number of years of study or practical experience, that the business particularly needs (a prime example is a CTO in a tech company – primarily if they were also the original founder of the business).

As an aside, it is interesting to note that a similar situation and way of thinking often comes about regarding divisional/function heads and specialist individuals in their team – whereby there is an expectation or “natural order” that a specialist within a team cannot be paid more than the person leading/managing that team.

Again, we consider that automatically presuming that “subordinate” specialists cannot be paid more than “top” executives can be a self-defeating policy for a business.  Each should be celebrated for what they bring.

In such circumstances, we often find that the solution to overcoming this is to have in place a suitable job architecture framework that differentiates pay and performance based upon different workstreams (managerial, professional, operational etc).  Putting in place such a structure allows people within a business to better compare and understand both the similarities and the differences of the roles.

Should you want to know more or want someone to help you explore your thinking on this, please contact Stuart James (stuart.james@mm-k.com) in the first instance.

Back to News