A review of Scottish university governance has recommended setting appropriate pay levels for principals so that they do not suffer a public backlash similar to that being experienced by top bankers.

The report, from a panel led by Ferdinand von Prondzynski, principal of Robert Gordon University, also calls for the chair of governing bodies to be elected by staff and students.

Without such action, Professor von Prondzynski said, there was a danger that university heads would be viewed in the same negative light as very highly paid chief executives.

"Universities in particular need to be out of that scene," he said.

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Controversy over the pay of principals and other senior university staff "has not helped to engender trust in governance", says the Report of the Review of Higher Education Governance in Scotland, published on 1 February.

It recommends that the Scottish government look at including principals in the national pay spine, which currently extends only up to the grade of professor.

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Professor von Prondzynski said that "the whole idea behind the pay negotiation [that led to a national pay spine] is that all categories [of employment] would be considered".

The report claims that the way principals' pay is calculated is not transparent and "it is also not always clear what other benefits, or bonus payments, may be available".

"In the light of the wider public debate about executive pay and bonuses", universities should either abolish "any payments that may be perceived as bonuses" or bring them into line with the scale of "contribution payments" available to other staff, it advises.

Remuneration committees should include students and staff, and any increase in principals' pay beyond those of normal staff should be halted until these reforms have been put in place, the report adds.

Professor von Prondzynski said that reforms to governing bodies - usually called "courts" in Scotland - will make them more of an independent counterweight to senior management.

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Under the plans put forward, the chair of the governing body would be elected in a ballot of staff, students and, possibly, external parties. The proposal was opposed by one of the five members of the committee that drew up the report.

Professor von Prondzynski also said that elected chairs should not be current or recent university staff to avoid the "bizarre" situation where the chair is a subordinate of the principal.

The governing bodies themselves should be at least 40 per cent female and include two student representatives, two directly elected staff representatives, two union representatives and two alumni, the report continues.

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In addition, it says that senior managers should not attend governing body meetings unless essential because "their presence can create an appearance of imbalance".

Professor von Prondzynski said that some of the recommendations might be seen as a "little bit tricky" by his fellow principals but argued that "anything that builds confidence" in universities would be good in the long run.

According to figures for 2009-10, the highest-paid principal in Scotland was Jim McDonald, head of the University of Strathclyde, who earned ?250,000.

Scottish principals' pay is broadly comparable to the salaries and benefits of all UK vice-chancellors, which averaged ?213,813 in 2009-10.

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david.matthews@tsleducation.com