The City & Guilds Foundation has revealed trustees considered, but later dropped, plans for executive incentive payments linked to the sale of its awarding business, insisting the proposals were “unconnected” to large bonuses paid by the new owner.
The charity, formally known as City & Guilds of London Institute (CGLI), faces a Charity Commission inquiry after it emerged new owner PeopleCert handed executives individual bonuses of up to £1.7 million soon after the awarding business was sold on October 31.
This week, City & Guilds Foundation admitted that in May there was “discussion” among trustees about the “possibility” of an “incentive payment” to executives to “help secure the greatest residual value to the charity for its future use”.
But the board “subsequently decided not to establish such an incentive” and claimed to record this decision in its October board meeting minutes, “principally because a higher sale price had already been achieved.”
A charity spokesperson said “no payments were made” under this proposed incentive scheme.
The foundation’s trustees have repeatedly insisted they “were not involved” in any pre or post-deal conversations about post-sale bonus payments made by PeopleCert, which were “unconnected” to their scheme.
However, it remains unclear exactly when trustees learned that their executives would earn big bonuses from the new owners or what steps they took to prevent conflicts of interest ahead of the sale.
The charity has also refused to confirm how much executives could have earned through its own aborted incentive scheme.
This week, City & Guilds Foundation also confirmed that its chair Dame Ann Limb, who inaccurately claimed she had a PhD, would step down at the end of this month “to take up [her] seat in the House of Lords”.
Big bonuses
The largest post-sale financial award is understood to have been handed to chief executive Kirstie Donnelly, who received a £1.7 million bonus alongside a £100,000 salary increase to £430,000, while finance director Abid Ismail reportedly received a £1.2 million bonus and 30 per cent salary increase to £300,000 per year.
A source with close knowledge of City & Guilds said they found the decision to sell off its business arm to PeopleCert “extraordinarily hard to understand”.
They called the bonuses “entirely disproportionate and questionable in their own right” and said executives in line for post-sale pay awards should have been held back from sale discussions to avoid “bias or misrepresentation”.
City & Guilds Ltd, the PeopleCert-owned subsidiary created during the purchase of the business, is also yet to comment on the accuracy of reports by Tom Bewick made in his The Skills Agenda substack that £5.1 million in bonuses was paid to executives in total shortly after the sale. Bewick is a former Federation of Awarding Bodies CEO, and Donnelly was FAB chair during his tenure.
City & Guilds Ltd’s spokespeople ignored repeated requests for comment from FE Week this week.
They previously told FE Week: “Any awards to employees are a matter for City & Guilds Ltd and are guided by commercial practice to ensure talent and expertise is retained.”
‘Misunderstanding and misreporting’
In response to a Daily Telegraph report that charity trustees discussed bonuses as early as July 2024, a spokesperson for the foundation claimed there had been a “misunderstanding and misreporting” of their statements.
They added: “CGLI can confirm that in May 2025 there was a discussion among CGLI trustees about the possibility of an incentive payment to members of the [executive leadership team] in order to help secure the greatest residual value to the charity for its future use.
“However, the board subsequently decided not to establish such an incentive (as recorded in the October board meeting), principally because a higher sale price had already been achieved, and no payments were made.
“The amounts under discussion were different to the sums that CGL subsequently decided to pay out post-sale and are unconnected.”
‘New information’ probed
The Charity Commission opened a statutory inquiry last week based on “new information” after initially accepting City & Guilds’ trustees’ “assurances” ahead of the sale.
Investigators will now scrutinise those assurances, trustee decision-making that led to the sale, and post-sale executive bonuses.
Trustees approved the sale in October after 30 months of “thorough consideration” that included “extensive input” from external advisors.
But multiple FE leaders have told FE Week they are unconvinced that the business sale was the best option for the charity.
The foundation has also refused to confirm exactly how much PeopleCert paid for the awarding business, claiming the terms were “commercially confidential”.
It is now understood to have £180-200 million in “gross assets” and a guarantee of rent-free office space for the next five years.
The charity said it would invest the profits to “produce a return” that can expand its role as a “social investor and change maker” in skills and education, such as bursaries for disadvantaged learners.
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