The Housing Corporation has threatened to take action against associations that award executives excessive pay.
A good practice note released on Monday said senior executives should not be automatically entitled to bonuses, and contracts should "not permit payment for failure".

It warned that boards ignoring the guidelines risked "bringing themselves and the sector into disrepute".

It said: "We take failure to deal with matters of executive pay responsibly as a sign that a board is not properly in control. In these circumstances, we will take regulatory action."

The guidance, Rewards and Risks (Regulatory Code Good Practice Note 10), follows a string of high-profile cases where housing associations were criticised for awarding generous pay packages.

Jon Rouse, the corporation's new chief executive, has taken a £25,000 pay cut to hammer home the message (HT 11 June, page 22).

Corporation chairman Peter Dixon pledged not to overload associations with more paperwork but said the body would step in if its attention was drawn to excessive pay. "If something goes wrong, we would expect to find policies that upheld the guidance in place when we investigate," he said.

The guidance includes advice on setting a salary level appropriate to the organisation's size and nature and linking bonuses to successes. However, it does not suggest figures.

Source

Housing Today