In 2017 executive pay was given formal prominence for the first time in the Academies financial handbook — now the Academy trust handbook (ATH) — and since then, the rules have only become more refined, specific, and robust. It's a topic that is still firmly on the Department for Education’s agenda.
The 2025 ATH continues this journey, raising expectations on boards once again. Trust boards are required to ensure executive pay decisions are:
- Transparent – no surprises or hidden processes
- Proportionate – in line with sector and public sector benchmarks
- Defensible – able to stand up to challenge from the DfE or the public
These principles are not new — but the tone of the guidance has shifted. The message is clear: there is no discretion to ignore these standards.
In particular, the DfE has stated that the Handbook provisions mean when it comes to executive pay, the full board must approve the final decision — even if you have a remuneration committee doing the detailed work.
Importantly, the DfE’s focus is on fairness and transparency, not on forcing pay down across the sector. Trusts with a clear, evidence-led process should feel confident that their decisions can be explained and defended.
Why a properly constituted remuneration committee still matters
If the full board has to make the final decision, why bother with a separate committee? Because in my experience, a well-run remuneration committee makes the process more rigorous, more objective, and more efficient — and it makes the full board’s job easier without compromising quality.
A strong committee should be:
- Properly constituted – with clear terms of reference and a defined place in the scheme of delegation
- Skilled – made up of at least three trustees with experience in finance, HR, or public sector governance
- Independent – willing to challenge and take advice from external experts on benchmarking and sector trends
This structure allows for robust scrutiny, helps limit conflicts of interest, and ensures pay decisions are consistent. It also takes pressure off the full board by doing the detailed preparatory work and providing a clear, evidence-based recommendation for approval.
The committee should also maintain and review the trust’s pay policy to ensure it remains fit for purpose. This is detailed and skilled work that is hard to manage with the entire board involved.
Finally, planning committee meetings and board approvals well in advance in the annual governance calendar helps avoid last-minute pressure points and ensures there is enough time for robust discussion and challenge before the decision is taken.
What this means for trustees and executives
For trustees:
- Take executive pay setting seriously – this is a key board responsibility. If the DfE are raising the scrutiny, so should you.
- Use a remuneration committee to do the detailed work but always bring the final decision to the board for formal approval.
- Take responsibility for your own skills and learning and seek out appropriate training via CST and other resources.
- Be ready to defend decisions publicly and under DfE scrutiny.
- Make sure minutes and supporting evidence tell a clear story of robust discussion and challenge.
- Maintain open, honest communication with executives so that expectations are managed and decisions are not a surprise.
For chief executives and senior leaders:
- Recognise that pay decisions are not just about individual performance — they are also about public accountability.
- Expect evidence-led decisions and engage constructively with the remuneration committee and board, but remember you must not be involved in setting your own pay and conditions.
- Understand that the DfE may intervene if pay is considered out of line, regardless of trust performance.
The bottom line
The 2025 ATH doesn’t introduce a new philosophy, it simply makes expectations crystal clear. Executive pay has always demanded careful judgment, but now that judgment must be rigorous, documented, and ready to withstand scrutiny.
CST’s recently updated Setting executive pay guidance offers more detailed exploration of all these issues, and the 2025 Salary survey of executive leadership roles, created with Brightmine, is a great starting point for benchmarking.
If the DfE is treating this as a high-priority issue, so must trust boards. Confidence in your process comes not just from the data you use but from the quality of your governance: the challenge, the discussion, the rationale, and the decision itself.
Trusts that invest in clear processes, strong committees, and open communication will be in the best position to get this right — and to maintain public confidence in the sector.
- Emma Hughes is a partner at Browne Jacobson, a CST platinum partner. Browne Jacobson offers support for academy trust boards with all aspects of executive pay setting and reward strategy.
We welcome perspectives from a diverse range of guest contributors. The opinions expressed in blogs are the views of the author(s), and should not be read as CST guidance or CST’s position.
