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Setting executive pay

Key considerations for trustees setting executive leader pay in an academy trust.

Guidance
20/08/2021
people in meeting looking across each other at table

Setting the framework for the pay of the senior executive leader in an academy trust is a key responsibility of the trust board. Trustees must ensure that the pay and leadership structure is in keeping with the Nolan principles, is affordable and sustainable in the long term, and is appropriate for the level of responsibility undertaken.

It is also important for the trust board to think about the sector overall, and the position of academy trusts as charities. While trusts need to reward leaders properly, this guidance starts from the premise that trustees must remain conscious that salaries are paid from public money.

The vast majority of academy trusts have set executive pay within reasonable and justifiable parameters — this guidance outlines the key considerations for reaching this point. None of the considerations covered should be looked at in isolation; each should come together to form the basis for the trust board’s decision.

This guidance covers:

  • what the Education and Skills Funding Agency says about setting executive pay
  • recruitment and retention considerations
  • pay benchmarking suggestions
  • pensions and bonuses
  • the use of pay ratios
  • questions for trustees to consider when setting pay

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