MAT CEO pay is in the public eye again and, given how high it is, it’s right that trustees should think hard about how they work it out, writes Gillian Allcroft
It is the season to scrutinise academy trusts’ accounts and, as ever, the hot topics are related-party transactions and executive pay.
There are no prizes for guessing the winner in the latter stakes; Sir Dan Moynihan’s salary is now reported as being between £440,000 and 445,000 (more if you include pension benefits).
Yes, the Harris Federation on a number of measures is very successful, but it’s still an eye-watering amount of money. It is also the case that when it comes to MAT boss pay, Moynihan is very much the outlier. While it would be a fib to say I’ve scrutinised the accounts of every MAT, the next highest figure I’ve managed to find so far was £240,000-250,000, a not insignificant sum, but some way off those lofty heights.
So what is the appropriate salary for a MAT CEO, what should be taken into account, and when is it too high?
Benchmarking is a tool, not the answer, especially if it fuels a race to the top
Setting the CEO’s pay is entirely the responsibility of the board. Academy trusts are charitable companies, trustees are governing publicly-funded institutions and are bound by the Nolan principles of public life, which should give pause for thought when making decisions. Trustees need to be especially mindful that public service doesn’t come with a golden salary goose.
There isn’t a pay handbook because salary and conditions were one of the vaunted original freedoms of academy status. So there are no rules, apart from a sentence in the academies financial handbook:
“The board of trustees must ensure that their decisions about levels of executive pay follow a robust evidence-based process and are reflective of the individual’s role and responsibilities.”
But it doesn’t tell you how to do it. So it’s over to you trustees, make it up as you go along.
Although academy trusts are not subject to the school teachers’ pay and conditions document (STPCD), many have chosen to stick with it, partly because many trusts weren’t all that bothered about the pay freedoms and were happy to use an established framework.
The leadership range in the STPCD makes specific references to headteachers in charge of more than one school. So for the smaller MATs of between two and five schools, the STPCD remains a reasonable starting point.
Once a MAT gets larger it becomes more difficult to relate the pay of the CEO to the STPCD, and there is something of a question mark over whether we should.
MAT CEOs are unlikely to be even the substantive headteacher of one of the schools in the MAT, let alone in the classroom. Once you get past 10 schools, it’s a moot point if such a joint role is even possible.
A number of our members have asked if benchmarking data exists. It doesn’t – other than this annual exercise of scouring accounts to find the highest figure. The NGA has been asking the Department for Education to provide more guidance on executive pay for some years, and a plan to provide salary benchmarking data unfortunately fell by the wayside a while ago.
It isn’t a straightforward exercise, but while there is no handy salary ready-reckoner, there are indicators trustees can easily look at: MATs of similar size and complexity, and the numbers of sites and pupils within the MAT for instance. Annual salary reviews should take into account the performance of a MAT, but remember the Nolan principles, so don’t get carried away. Benchmarking is a tool, not the answer, especially if it fuels a race to the top.
Last but not least, the CEO is but one member of staff. What is the differential between the CEO’s pay and that of other employees? If that stretches too far you just might find an exodus on your hands. Trustees could consider putting in place a ratio between the salary of the CEO compared to the lowest paid members of staff.
Gillian Allcroft is Deputy Chief Executive of the National Governance Association, an organisation contracted by the government to deliver governance leadership programmes.