New City & Guilds owners tripled bosses’ pay amid £22m cost-cutting drive | Business
The new owners of vocational training provider City & Guilds appear to have more than tripled the pay of its six top executives as the company cuts £22 million in costs and downsizes its UK workforce.
The huge increases in pay and bonuses were revealed amid the scandal over the sale of the qualification awards business by its former owner, the UK charity City & Guilds London Institute (CGLI), to international certification company PeopleCert.
Last week Kirstie Donnelly and Abid Ismail, chief executive and chief financial officer of City & Guilds (C&G), were placed on leave as PeopleCert launched an investigation into how it acquired the training and rewards business from CGLI.
The sale triggered a legal investigation by the Charity Commission after the Guardian newspaper revealed that Donnelly and Ismail were given million-pound bonuses after privatisation.
The Guardian understands that since C&G became a private business, cumulative pay for the qualification body’s six most senior executives has risen by nearly 240% to around £6.2 million in the current financial year, from the £1.8 million reported in its last results to 31 August 2024.
This increase is believed to include one-off bonuses of more than £4 million to these six executives (including a £1.7 million award to Donnelly and a £1.2 million award to Ismail) and a cumulative increase in salaries and payments from the annual bonus scheme of around 13%; this increase now appears to total more than £2 million for the group of six.
Overall, the Guardian understands that one-off bonuses paid to C&G executives at the newly privatized company totaled around £4.5 million.
Asked about the sharp increase in the wage bill, a PeopleCert spokesperson said: “The business has no further comment at this stage.”
The increase in bosses’ pay comes after the Guardian reported that C&G has embarked on a £22 million cost-cutting drive since its sale last October and will reduce the size of its UK workforce by hundreds of positions.
In a presentation published by PeopleCert last month, the company said £13 million of the savings were “staff cost synergies”, which would largely be achieved by not replacing staff leaving the institute with UK recruits.
The document alludes to C&G owning multiple products. 1,600 personnel and 1,800 “employees” on short-term contracts, with a “attrition” rate equivalent to around 300 people leaving a year, and explained how PeopleCert plans to move a third of those jobs to Greece “at some cost”. [of] Up to 50% lower”.
The presentation stated that the same number of roles “will not be replaced due to conflicting functions”, while the remainder of those leaving will be replaced by people recruited in the UK.
The presentation appears to have been removed from the PeopleCert website after the Guardian published its report last month.
The pay awards, which coincided with an extensive cost-cutting programme, proved an embarrassment for the privatized company and its former charity owner.
C&G previously said: “The trustees did not participate in any pre- or post-deal discussions regarding CGL directors’ remuneration issues that would apply post-sale. This is a matter for the new owners of City & Guilds Ltd.”
However, the Guardian understands that talks are ongoing between the charity’s board of trustees in 2024 and a vote on bonuses is being held in May 2025, with bonuses of four times the salary being considered. Although CGLI says trustees subsequently voted not to pay bonuses related to the sale, the figures discussed appear to be similar to those given to directors by the private company.
PeopleCert did not explain the apparent coincidence when asked by the Guardian.
CGLI said it was co-operating with the Charity Commission investigation and was “confident that all actions taken by the trustees were appropriate, transparent and in line with our charitable purpose”.
