Demands have been made for more transparency around executive remuneration after an investigation was launched over a pay-off to the former principal of the University of Aberdeen.

The Scottish Funding Council has begun a review into the circumstances surrounding a payment made to Sir Ian Diamond. The investigation is thought to be in relation to £282,000 paid to Sir Ian in respect of a 12-month notice period.

Sir Ian announced his retirement plans in August 2017 but is said to have waited until July 2018, when he actually stepped down from his post, before triggering his notice period. This means he is still officially being paid for a position he left months ago.

During the intervening period he had continued to receive his full salary and pension contributions, totalling £312,000.

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Lewis Macdonald, MSP for North East Scotland, said the payment was in the public domain but “hiding in plain sight” in the university’s accounts, when it was drawn to his attention.

“A 12-month notice period would be something many people would be pleased to have and a large salary is something everybody would be pleased to have.

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“But to have those two advantages for a senior post and then to have what appears to be special arrangements around how the notice period is worked out seemed to me just a step too far.”

Mr Macdonald said he had asked Aberdeen to explain “whether this is their normal practice” but had been told the university would not be in a position to comment due to the investigation.

“The key to the whole thing is transparency,” added the Scottish Labour MSP.

Mary Senior, Scotland official at the University and College Union, said there was a “lack of transparency around how and why these golden goodbyes are given”.

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Such decisions “perpetuate the divisions between those fat cats at the top and the rest of the staff who are the ones delivering the teaching, research and student support”, she added.

A spokeswoman for Aberdeen UCU said members were “deeply concerned by the failures of governance”, especially in the context of the university claiming its financial position was “precarious”, she added.

Karen Watt, the SFC’s chief executive, said: “We have begun a review, with the full cooperation of the University of Aberdeen, into the circumstances surrounding a payment made to its former principal to determine whether it met the clear governance and value for money requirements we make of all the institutions we fund.”

Aberdeen’s senior governor, Esther Roberton, said she shared the SFC’s concerns that “best use is made of the public purse”.

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“I therefore welcome this review and will ensure that we cooperate fully to determine the facts surrounding the end of service arrangements for the former principal,” she said.

nick.mayo@timeshighereducation.com