Guidance for academy trusts when setting executive salaries

The topic of executive pay in academy trusts has proved controversial so new 'Setting executive salaries: guidance for academy trusts'  from the Education & Skills Funding Agency (ESFA) is welcome.

The guidance, issued in July, is the most comprehensive information we have had to date and Craig Vincent, Head of HR Consultancy Services, has explained the implications and obligations for academy trusts.

In May 2019, 94 academy trusts were ordered to justify the six-figure salaries of head teachers or chief executives by the Department for Education (DfE). These 94 academy trusts were newly identified as paying staff members in excess of £100k. In addition to this; the DfE also contacted a further 31 trusts that had previously failed to provide adequate justification for paying staff members over £100k per annum.

A total of 213 academy trusts have been asked to justify high salaries in the last 18 months.

The new guidance confirms the obligations an academy trust has when setting executive pay and most importantly categorises points to consider when reaching a decision.

There are actually 15 points for consideration which perhaps highlights the level of scrutiny the ESFA expect from academy trusts moving forward (despite the previous lack of guidance).

We propose that all CFOs, CEOs, Chair of Trustees and Pay Committee members familiarise themselves with this document. We advise that Trusts record how they have used this guidance when setting and reviewing pay of executive staff in preparation from any possible scrutiny from the ESFA.

We will be discussing this topic and many others at our upcoming annual Employment and HR in Education Conferences in Leeds on Tuesday, 8 October and London on Thursday 10 October. Details of all our events including these can be found here.