Executive pay under the Academy Trust Handbook 2026: what academy trusts need to know

Department for Education (DfE) scrutiny of academy trust executive pay has increased steadily over the last decade, driven by concerns around the use of public funds, high-profile executive salaries, and greater expectations of transparency and accountability.

The latest development comes through the Academy Trust Handbook 2026 (ATH 2026), which introduces significant new controls on senior pay and represents a shift from requiring trusts to justify executive remuneration towards direct regulatory oversight of the highest-paid appointments.

The ATH 2026 reinforces existing requirements that executive pay must be determined through a robust, evidence-based process and be a reasonable and defensible reflection of the individual's role and responsibilities. Boards must maintain a transparent pay policy, ensure independent scrutiny of pay decisions, and document the rationale for remuneration levels. Individuals must not be involved in decisions about their own pay, and executive remuneration remains subject to challenge by the DfE.

The most significant changes concern pay increases and high-value appointments. From 1 October 2026, executive remuneration must not increase at a faster rate than teachers' pay unless the trust obtains prior DfE approval. In addition, trusts must obtain DfE approval before advertising any new role with remuneration above £174,000 (or the pro-rata equivalent for part-time staff), or where performance-related pay exceeds £25,000.

Trusts should therefore ensure that proposed executive remuneration packages are considered at an early stage and supported by a robust business case.

Alongside these changes, the existing transparency requirements remain. Trusts must continue to publish the number of employees whose total benefits exceed £100,000 in £10,000 bandings and ensure that senior employees' payroll arrangements comply with HM Treasury guidance.

One practical issue will be how the new £174,000 threshold operates in practice. DfE approval must be obtained before advertising roles above that level, regardless of whether remuneration is stated in the advert. In any event, the Government is currently consulting on proposals that could require employers to disclose pay information during recruitment, potentially including in job advertisements. If introduced, those reforms would further increase transparency around executive remuneration.

Importantly, the new approval requirements apply only to new appointments advertised on or after 1 October 2026. Existing remuneration arrangements are therefore unlikely to be affected.

Nevertheless, the changes may have significant consequences for recruitment and succession planning. Executives already earning above the threshold may be less willing to move between trusts if equivalent remuneration packages become harder to secure. Trusts may also find it more difficult to attract experienced leaders from outside the sector.

The changes could also affect leadership pipelines. Many trusts aim to develop headteachers into executive roles, but some school leaders may question whether the increased accountability, wider responsibilities and greater public scrutiny associated with executive positions are sufficiently reflected in the remuneration available. This may make progression into executive leadership less attractive for some candidates.

The impact may be felt particularly by trusts seeking to recruit chief executive officers. CEOs are often responsible for multiple schools, substantial budgets, and large workforces. If remuneration becomes increasingly constrained, some trusts may find it harder to attract candidates with the necessary experience and expertise.

The approval process itself may create further recruitment challenges. Because DfE approval must be secured before certain roles can be advertised, trusts may experience delays in launching recruitment campaigns. The DfE has not yet indicated how quickly applications will be processed, meaning trusts may need to build additional time into recruitment exercises and succession plans, particularly where key leadership vacancies arise unexpectedly.

There also remains considerable uncertainty regarding the approval process. The DfE has not provided guidance on the circumstances in which remuneration above £174,000 will be approved, the evidence required to support applications, or the likely timescales for decisions. The first trusts to seek approval are therefore likely to establish the practical benchmarks for future applications.

In the meantime, trusts contemplating appointments above the threshold should begin preparing robust supporting evidence, including benchmarking data, recruitment market information, and a clear explanation of why the proposed package represents value for money.

Ultimately, the ATH 2026 represents a significant development in the regulation of academy trust executive pay. While boards retain responsibility for setting remuneration, that discretion is now subject to greater oversight than ever before. Trusts should use the period before October 2026 to review their pay policies, recruitment procedures, and succession plans to ensure they are prepared for the new regime.