Executive pay and severance controls

2.35. The trust must publish on its website in a separate readily accessible form the number of employees whose benefits exceeded £100,000, in £10,000 bandings, for the previous year ended 31 August. Benefits for this purpose include salary, employers’ pension contributions, other taxable benefits and termination payments. Where the academy trust has entered into an off-payroll arrangement with someone who is not an employee, the amount paid by the trust for that person’s work for the trust must also be included in the website disclosure where payment exceeds £100,000 as if they were an employee.

2.31. The board of trustees must ensure its decisions about levels of executive pay (including salary and any other benefits) follow a robust evidence-based process and are a reasonable and defensible reflection of the individual’s role and responsibilities. No individual can be involved in deciding their remuneration. Decisions about executive pay may be challenged by DfE. 2.32. The board must discharge its responsibilities effectively, ensuring its approach to, and levels of, pay and benefits is transparent, proportionate and defensible. This must be documented in an agreed pay policy, which sets out the process for determining executive pay and includes: independent scrutiny by the board

5.13. Additionally, academy trusts must obtain prior DfE approval before making a special staff severance payment where any of the following apply: an exit package of £100,000 or above includes a special severance payment the employee earns over £174,000 a payment is novel, contentious or repercussive, Section 3.4 of HM Treasury’s guidance contains examples of such payments including where: the trust has legal advice that the chances of successfully defending the matter in a court or tribunal is more than 50%, and an exit package includes a confidentiality agreement, see 5.14 below Use of confidentiality clauses 5.14. In respect of special severance payments, confidentiality clauses are always novel, contentious or repercussive, and so must not be used unless the trust has obtained prior DfE approval

In this document the Department for Education (DfE) provides an overarching framework for financial governance, management and other controls, for academy trusts in England. Compliance with the requirements set out in this document is a condition of the funding agreement between each trust and the Secretary of State for Education. Trustees, accounting officers, principals, senior leaders and others with responsibility for governing, managing or auditing an academy trust must understand this handbook and adhere to its contents.

2.33. Executive remuneration must not increase at a faster rate than that of the academy trust’s teachers, unless there is a clear justification for it to do so. Where the academy trust considers there is a justification, it must seek approval in advance from DfE.

2.34. From 1 October 2026, for new appointments within academy trusts where remuneration exceeds £174,000, or the pro rata equivalent for part-time staff, or performance-related pay above £25,000, approval from DfE must be obtained before the post is advertised.