Executive Pay in Academy Trusts:

Key Requirements in the Academy Trust Handbook 2025

The 2025 Handbook, effective from 1 September 2025 includes a number of requirements Boards should consider when setting executive pay.

• Board Approval: Decisions on executive pay must be formally approved by the board of trustees.
• Documented Rationale: The rationale for pay decisions, including benchmarking data and external advice, must be clearly documented.
• Transparency and Publication: Trusts must publish the number of employees whose benefits exceeded £100,000 in £10,000 bandings on the trust’s website.
• Pay Restraint: A general presumption that executive pay and benefits should not increase at a faster rate than those of teachers.
• Defensible Value for Money: Boards must ensure that pay is defensible relative to the public sector market and represents good value for money.

Sector Observations and Good Practice

It is common for academy trusts to establish remuneration committees to specifically consider the setting of executive pay. Remuneration committees should be well-constituted, with skilled trustees. Remuneration committee decision making, including any benchmarking and external advice sought, should be formally documented to ensure the Trust is able to justify any decisions made. Pay decisions should be linked to performance targets and consider outcomes such as improved Ofsted ratings, educational performance and operational complexity.

Importantly, the DfE’s language has shifted to indicate greater intent to scrutinise both pay levels and the policies supporting them. Boards must be prepared to justify their decisions with clear evidence.

Conclusion

There can be little disagreement that the question of value for money should remain at the forefront of key decision makers within academy trusts, but, as ever, agreeing on what constitutes ‘value for money’ is open to interpretation. A counterpoint to the common narrative is that while a typical academy is not a ‘business’ in the traditional sense, it does have obligations (procurement, contracts, salaries etc.) and costs which require prudent, business-like management. If we are to consider an Academy Trust as a business, run for the benefit of the pupils (where pupils take on the role of stakeholders), then the CEO and management team are working to improve the returns (better education, facilities and general schooling in this case).

The issue of remuneration in the sector is not always a black and white issue. It should be noted that CEOs of Multi-Academy Trusts are often responsible for the education of thousands of children, along with the careers and livelihoods of teachers and other staff. This also takes into account the operational responsibilities with which they are tasked, relating to good corporate governance.

Indeed in some cases, many of the higher paid CEOs choose to use their skills and experience to help the most challenging and struggling schools where pupils often require unique educational support. In such cases, these schools require substantial amounts of expertise, time, hard work and patience. They are often the focus of the local and national press which also brings a level of personal scrutiny and reputational risk with being involved with the schools. As a result, these roles will naturally command higher salaries to attract the most qualified and experienced candidates.

The setting of executive pay in academy trusts is now subject to more rigorous governance, transparency, and accountability than ever before. Boards must ensure that their pay policies are robust, evidence-based, and capable of withstanding scrutiny. Ultimately, the key is to demonstrate that executive pay represents good value for money and directly benefits pupils within the trust.