Executive pay in academy trusts: What school leaders need to know

The Department for Education has updated its guidance on executive pay in academy trusts, alongside the introduction of new senior pay controls that came into force on 1 October 2026. Trust boards, remuneration committees, CFOs and HR leaders should take note. 

Whilst academy trusts continue to determine their own executive pay arrangements, trusts seeking to appoint executives with remuneration above £174,000 will now require prior approval from the DfE before advertising the role. Approval is also required for performance-related payments above £25,000 and, in certain circumstances, where executive pay increases exceed those awarded to teachers. 

The updated guidance reinforces a principle that many trusts will already be familiar with: executive pay decisions must be transparent, evidence-based, proportionate and capable of withstanding public scrutiny. Trust boards remain responsible for ensuring remuneration decisions are robust, fair, reasonable and defensible. 

When assessing executive pay proposals, the DfE has indicated that five broad areas will be considered:

• The total remuneration package, including pension contributions and benefits.
• The scope, influence and impact of the role.
• Benchmarking against comparable organisations.
• Trust-specific factors, including size, complexity, performance and financial health.
• Labour market conditions and geographical factors affecting recruitment. 

Importantly, trusts should not assume that an incoming CEO should automatically receive the same package as their predecessor. Evidence will need to demonstrate why the proposed salary is justified in the current context of the trust and the market. 

For HR directors and HR managers, this is a timely reminder to review executive pay policies, remuneration committee processes and benchmarking arrangements. Robust documentation is likely to be more important than ever. Boards should be able to clearly evidence the rationale behind executive pay decisions and demonstrate how they deliver value for money whilst supporting strategic leadership capacity. 

In practice, trusts may wish to ensure they have:

• A documented executive pay policy.
• Independent scrutiny of remuneration decisions.
• Appropriate benchmarking data from comparable trusts.
• A clear record of the factors considered by the board.
• Evidence showing how pay decisions align with trust strategy, performance and organisational complexity. 

As media and regulatory scrutiny of executive pay continues, governing boards will need to balance recruitment and retention challenges against expectations of transparency and value for money. The focus is increasingly not just on what is being paid, but on the evidence supporting why it is being paid.