HOW VERY CHARITABLE
Church hands £1million in bonuses to finance bosses
THE Church of England paid record bonuses of more than £1million last year to the asset managers who look after its wealth.
The historically high ‘incentive payments’ were made even though the Church’s financial arm failed to meet its investment targets and the value of its holdings, worth more than £8billion, shrank.
They were paid despite the regular protests by senior churchmen that high salaries, generous pay rises and big bonuses for bank executives are a cause of inequality and damage social stability.
The Church’s own guidelines for other businesses call for bonuses to be paid only in company shares.
Among the bonuses paid out last year was more than a quarter of a million pounds to Tom Joy, the investment chief at the Church Commissioners.
Mr Joy’s £256,000 bonus was another record for the Church. He was also given an increase of six per cent on his basic salary to take it to £280,000. The pay rise, of almost three times the level of inflation, meant that he received a total of £536,000 last year. By contrast the benchmark stipend for a vicar last year was more than ten times lower at £25,950, a level that was raised by two per cent on the previous year.
The scale of bonuses was revealed in the Commissioners’ report for 2018, which showed that the organisation’s investments and property holdings dropped in value from £8.3billion to £8.2billion.
A major reason was that investment managers achieved a return of only 1.8 per cent, below inflation and well below their target of five per cent over inflation. Loretta Minghella, the First Church Estates Commissioner and effective chief executive of the organisation, said in the report that the blame for poor returns lay with falling equity markets.
She praised the Commissioners’ investment managers, but added: ‘We are giving serious thought to the sustainability of our current return target, which looks increasingly unrealistic in the short to medium term.’ Neverthe
‘Damage social stability’
less, the Commissioners handed out ‘long-term incentive payments’ to nine staff, including Mr Joy. The bonuses totalled £1.08 million – up from £986,232 in the previous year.
The bonus pot meant that average payments to managers other than Mr Joy were running at close to £100,000.
Mr Joy’s payout took the total of the bonuses he has received since joining the Commissioners as director of investments to £1,168,000.
The Archbishop of Canterbury, Justin Welby, has been among senior CofE figures who have condemned the use of bonuses by banks. In 2013, as a member of the Parliamentary Commmission on Banking Standards, he told HSBC executives that their bonus payments were unnecessary.
‘It seems to me that you are putting huge effort into a values-based organisation and yet at the end of the day, particularly for your most senior staff who are most important as regards setting values and culture, you seem to be saying the only way you can motivate them to any significant extent is with cash,’ he said.
In a speech to the TUC last autumn, the Archbishop complained that pay rises for chief executives of large companies were much greater than those for ordinary workers.
A spokesman for the Church Commissioners said: ‘This was not a year of poor performance. Despite a challenging market environment, the Commissioners produced a positive return and our tenth year of positive returns. [Bonus] payments do not relate to the single calendar year but to a five-year period.
‘The investment team is remunerated in line with wider practice in the investment sector with compensation designed to reflect the market for investment specialists.’
He added that Mr Joy’s bonus ‘reflects long-term performance over five years’.