Law Society chief executive Des Hudson – who six months ago suffered a humiliating formal vote of no confidence – was awarded a 25 per cent pay rise last year, according to figures from the body’s annual report.
The figures, released in the last few days, shows Hudson’s pay-package rose to £355,000 – but owing to a change in Chancery Lane’s accounting period, that wage covers only the first 10 months of last year. Extended over a full year, Hudson’s salary would have rocketed to £426,000 – or £86,000 more than his 2012 package.
However, Chancery Lane claims the chief executive’s actual pay for last year was £404,500 – still an inflation-busting 20 per cent.
The lower figure resulted from payments made in the first 10 months of the year that “related to bonuses from previous years, which was not the case in the last two months of 2013”.
Regardless, the increase – which falls against a backdrop of a national 2.5 to 3 per cent inflation rate – is likely to inflame anti-Hudson feeling within segments of the profession. Last December, criminal law practitioners slapped both him and society president Nicholas Fluck with a motion of no confidence following growing anger at what they maintained was Chancery Lane’s failure to fight effectively the government’s programme of legal aid cuts (17 December 2013).
Hudson is leaving the society at the end of July, although he is adamant his departure is not linked to fall out from the no confidence vote and the threat of another anti-leadership motion (14 March 2014).
The Law Society chief executive’s remuneration and increased pay contrast with the approach to his counterpart at the Solicitors Regulation Authority. The chief executive at the regulatory body earned approximately £235,000 last year, about a 5 per cent increase on the previous year.
Hudson’s salary has been controversial since arriving at Chancery Lane six years ago. Hudson started at the society on an annual package of about £231,000. But that increased dramatically despite the economic recession and several years during which the society’s finances plummeted into the red.
This year Chancery Lane hailed a return to surplus, albeit on the abbreviated accounting period of 10 months. It reported a £7.67m surplus for last year, recovering from deficits in 2011 and 2012 of £54.3m and £22m respectively.
The society credited an increase in practising certificate fee income with gains from the “finalisation of the defined benefit pension scheme” along with “various cost reduction initiatives” for turning round the books.
A Chancery Lane spokesman said the reporting period had changed to align it with the society’s business planning year, which runs from 1 November to 31 October.
“It made sense to align the two so that we can do the budget and business planning in harmony rather than in isolation,” he said.
Commenting on the chief executive’s pay-package, the spokesman said: “The basic salary increased in line with other executive level salaries at the society. The figure quoted is higher because it includes other payments such as retention and performance-related bonuses.”