Academy chains who only benchmark their leaders’ pay against others in the sector can lead to a “race to the top” in chief executive salaries,  a leader in school governance has warned.

Emma Knights, the chief executive of the National Governance Association told Tes that although the academy trusts were charities and part of the “third sector”, some chief executives were being offered wages that were reminiscent of those in private businesses.

However, Ms Knights stressed that multi-academy trusts (MATs) paying out “astronomical” wages were outliers and not the norm in the sector.

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She urged trusts to use the NGA’s guidance on pay which recommends looking at other public sector and charity salaries for benchmarking.

“While benchmarking [against other MATs] has a role, there is a risk that it prompts a race to the top,” Ms Knights said.

“Most discussions around reward for MAT executives understandably start from headteacher pay, but some seem to make an assumption there needs to be of some sort of multiplier - a ratcheting up - as the trust takes on more schools.

“Being a chief executive of a multi-academy trust (MAT) is a very different role from being a headteacher. So why not look to the public sector and charities for benchmarks as we set out in our guidance.”

Ms Knights was responding to the findings of a Tes investigation which found a third of a group of top-paying trusts, which had been questioned by the Department for Education for awarding salaries of more than £150,000, gave pay rises to their chief executives and top earners last year.

And three-quarters of those trusts are still paying at least one member of staff wages of more than £150,000 a year.

But Leora Cruddas, the chief executive of the Confederation of School Trusts (CST) questioned the idea that benchmarking against other trusts could lead to a race to the top.

She said: “The CST’s position is that benchmarking is an important part of a trust board’s evidence in considering executive pay. I do not agree that this creates a ‘race to the top’ and would like to know the evidence behind this assertion.

“Benchmarking, particularly when undertaken independently, typically already does involve appropriate comparators across the wider public sector in roles with similar scale and complexity to that of multi-academy trusts.”

Commenting on why the majority of MATs paying £150,000 have continued to do so despite being challenged by the DfE, Ms Knights said that contracts of employment meant that employers can’t unilaterally change someone’s terms and conditions.

She said the government might look to create a framework for executive pay like the NHS in its attempts to reduce pay.

Ms Knights added: “Many MAT leaders enthusiastically promoting ethical leadership are embarrassed by the pay of some others in the sector. 

“It is in fact only a small fraction of MATs involved in astronomical pay; yet the coverage tarnishes all who lead in MATs.

“It is not helping academies in the PR battles, playing into the ‘privatisation’ critique.

“NGA has for years pointed out that academy trusts are part of the third sector, the charitable sector.

“However, offering and taking remuneration which is reminiscent of the private sector suggests otherwise.”

Pay guidance

The NGA produced guidance for trusts on setting pay last year.

Its recommendations include ensuring that ethics “play an essential role in your considerations around executive pay”.

The guidance also asks trusts to consider if its pay policy is being made solely to the benefit of children and young people. And it asks if trusts have evidence that this level of pay would be required to recruit a senior leader.

Ms Knight added: “Over the past year we have recognised a changing attitude in the MAT sector, with more exploration of this issue, in part because of greater scrutiny from the DfE and our comprehensive guidance.”

A Department for Education spokesperson said: “It is essential that we have the best people to lead our schools if we are to raise standards, but academy trust salaries should be justifiable and reflect the individual responsibility - particularly in cases of significant increases.

“Since 2017, we have challenged 278 academy trusts across the country in relation to their pay, and asked them to provide clear rationale for those receiving the highest salaries. We will be making further challenges in the coming months.”