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The ESFA releases new guidance for academy trusts around setting executive leaders' pay

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The ESFA has published new guidance to support academy trusts in making decisions about executive pay (including, but not limited to, chief executive officer/accounting officer, chief financial officer/finance director and executive head/principal). The guidance is intended to build upon the direction outlined in the Academies Financial Handbook, which was updated in June 2019. 

The guidance is intended to help academy trusts to:

  • make robust, fair, reasonable and defensible decisions about executive pay
  • identify the key points for consideration when setting executive salaries
  • determine a fair remuneration package that appropriately reflects the level of challenge and responsibility of the role
  • justify and be accountable for decisions around executive pay. 

The new guidelines set out some of the factors that academy trusts should be considering when setting and reviewing executive salaries. This includes:

  1. The academic performance and outcomes of the trust. 
  2. The level of educational challenge the trust may face as a result of its individual mission, motivations and values. 
  3. The financial performance of the trust – using data to measure the trust’s financial position and future projection.
  4. Whether the role presents additional challenges outside of those that would normally be expected of this position eg a role in leading future plans for the trust (eg expansion), additional accountabilities (eg leading a teaching school alliance) and responsibility for engaging the local community. 
  5. The experience of the individual – including what extra value the expertise will bring to the role.
  6. Consideration of the total remuneration package. 

While NAHT engaged productively with ESFA officials to secure greater clarity on a number of areas within the guidance, we continue to press for a national pay framework in which all roles are clearly defined within the STPCD, for all those employed in a national, publicly funded education system.

First published 10 July 2019