Key considerations for sports organisations on senior executive pay
Insight
This content was originally published in LawInSport, see here.
Senior executive remuneration in sport remains a hot topic of conversation and organisations and executives alike need to be alive to the complexities and considerations involved in setting executive pay within the sector. Sports organisations and the executives that they employ can often face a unique challenge due to the inherent tension between the commercial reality of modern sport and, in some cases, its amateur roots. It is important to remember that a number of sports in the UK have only been fully professional for the last 30 or so years and yet the sector is now a global multi-billion-dollar industry[1].
Employers within the sector can also include a wide variety of commercial and not-for-profit entities, ranging from governing bodies to clubs listed on stock markets and teams backed by private equity investment. Different types of sports organisations will adopt different approaches to remuneration, and it is therefore not possible to apply a one-size-fits-all all approach. The thoughts below therefore seek to set out some of the general principles and approaches that we see when advising both sports organisations and the senior executives who work for them.
For the purposes of this article, ‘senior executive’ refers to the most senior employees within an organisation, such as the Chief Executive Officer (CEO), Chief Financial Officer (CFO) and the Chief Operating Officer (COO). In a sporting context, this group might also include individuals such as the Chief Performance Officer (for example, The FA’s Chief Football Officer) or the Chief Technical Officer, which is common in motor racing.
This article looks at:
- Senior executive remuneration
- Annual salary
- Bonus/short-term incentives
- Long-term incentive plan (LTIP)
- Remuneration committee
- Retention and benefits
- Reputation
- Concluding comments
Senior executive remuneration
A senior executive’s remuneration package will generally be made up of some, or all, of the following elements:
Annual salary
This tends to be the only fixed aspect of an executive’s pay and is unaffected by the individual's or the relevant employer's performance. It is negotiated at the outset of the employment relationship and paid on a monthly basis. It is normally reviewed annually although organisations should ensure the contract is clear that there is no commitment to increase base salary in any particular year. The outcome of the initial negotiation when an executive commences employment is heavily dependent on the commercial bargaining power of the executive (i.e. how much does the organisation want them) and the particular sport in question (for example, CEOs at Premier League football clubs will generally be paid more than CEOs at smaller governing bodies or those largely reliant on public funding).
Bonus/short-term incentives
Some senior executives may receive a sign-on bonus when they commence employment. This is sometimes called a “golden handshake” or "golden hello" and is paid to the individual at the outset of their employment, often to compensate them for forfeiting a previous bonus at their former employer or to entice them to join an organisation. As with base salary, whether a golden handshake is agreed will depend on the bargaining power of the executive and whether they are forfeiting remuneration as part of leaving their previous employer. The organisation should also ensure that it has sufficient clawback rights (the right to recover payments made) if the executive resigns or is terminated for cause (such as for gross misconduct) early within the engagement. There may then be some negotiation over whether, for example, the full gross sum needs to be returned as part of any such arrangement, or only the net sum, with the senior executive then agreeing to use reasonable endeavours to seek to recover and then pay back the related taxes.
Many sports organisations will also operate bonus schemes, which are usually paid on an annual basis. Examples of bonuses in a sporting context might include a percentage of salary depending on the performance of the team (e.g. league/table position at the end of a season), meeting sales targets or completing specified projects. As a general rule, sports organisations should be wary of agreeing to guaranteed bonuses within the executive’s employment contract and ideally they should only be awarded at the employer’s discretion.
The contract would also ordinarily include conditions around payment (such as, for example, that the employee remained in employment and was not under notice of the termination of their employment as at the payment date). The contract should also make it clear that any such bonus is not a pensionable payment for the purposes of assessing any employer or employee pension contributions.
Long-term incentive plan (LTIP)
LTIPs are an effective mechanism for aligning an executive’s compensation with the organisation’s long-term performance and success and for incentivising an executive to stay in their employment for the medium to longer term. Outside of sport, an LTIP generally refers to an arrangement where an employee is awarded shares in their employer, subject to a period of continued employment and performance conditions over a period of time. However, where an LTIP is being offered within the sports sector, it would be more usual for this to be a cash incentive scheme with a performance or vesting period (the time during which benefits must be earned) of a number of years. This is more usual as most sports organisations (but certainly not all) will either not be in a position to or else be unwilling to award shares in the organisation.
LTIPs normally run for a specified period and the scheme will set out details such as the participants (for example, the management board or executive committee), performance period, the potential earnings under the scheme, targets/objectives and payment dates. Examples of objectives within cash incentive schemes for sports organisations can include:
- Financial performance, such as a particular target figure for profit before tax or net cash flow;
- The sporting performance of the team, athletes or organisation in question;
- Successful negotiation (or renegotiation) of media rights;
- Agreeing a particular number or type of commercial deals with partners/sponsors; and/or
- Organising specific events or tournaments.
The performance of the executive, and the organisation more generally, will be assessed against the relevant objectives to calculate the value of the award under the scheme within set parameters. Therefore, it is vital for the organisation that it carefully considers how the executive’s performance will be assessed for the purposes of the scheme. The objectives should be achievable but also not so easy that the executive will be paid out if they have performed reasonably well; it is possible that these objectives will be scrutinised at a later date and the organisation needs to be able to justify the rules of the scheme. The provisions relating to how the unvested portion of the LTIP will be dealt with on termination are also crucial, including the definitions of “good” and “bad” leaver; these are normally defined terms within the LTIP rules and vary between schemes. Essentially, a "good" leaver is someone who leaves under favourable or neutral circumstances such as retirement or redundancy and a "bad" leaver is someone who resigns from employment or is terminated for gross misconduct.
Remuneration committee
Depending on the size of the organisation, it may have a remuneration committee or “RemCo” (for example, the RFU has a remuneration committee[2]), which is responsible for setting senior management pay. It is the RemCo’s role to ensure executive pay aligns with the organisation's strategic goals and cultural values and is considered to be good corporate governance for the members of the RemCo to be independent non-executive directors (as confirmed in Section 5 of the UK Corporate Governance Code[3]). A truly independent RemCo helps to ensure that the individuals setting executive remuneration are sufficiently objective when deciding how much to pay executive directors.
The RemCo ought to then balance transparency, simplicity and proportionality to maintain public trust and avoid reputational risks. This is particularly important in sports organisations, where fans and communities have a vested interest in the performance of the club or sport. Sports clubs and teams are often the lifeblood of the community. Fans and other stakeholders will react strongly where they feel decisions are not being taken in the team or sport’s interests.
The RemCo will also need to consider any regulatory limits on executive pay. This is not currently commonplace in sport and it will be interesting to see, within football, if the new Independent Football Regulator (IFR) comments on executive pay in football in due course. Section 6(a) of the Football Governance Act 2025[4] (the Act) states that one of its objectives is to “protect and promote the financial soundness of regulated clubs” and Schedule 9 (Sanctions) also includes the right to make provisions determining an officer’s remuneration where a financial penalty is imposed due to them having committed an offence under the Act. It will therefore be important to keep an eye on how the IFR develops regarding executive remuneration in football.
Where an organisation is not big enough to warrant a RemCo, an alternative option is to seek external independent advice on benchmarking its executive remuneration.
Retention and benefits
High-performing executives are often in demand and one of the key challenges for sports organisations is retaining them. This might be easier where a director has a particular affiliation to a sport or club; however, some highly sought-after individuals will move between sports and/or teams.
While it is important to fairly remunerate the executive for the role they do, there are other ways to retain them. For example, culture is incredibly important and although it is true that culture is set from the top down, providing an environment for an executive to flourish is key. This can be done by ensuring key stakeholders are aligned with the management board’s objectives. In addition, providing an attractive benefits package in addition to an appropriate remuneration package can also incentivise an executive to stay. Benefits will often typically include private medical insurance and other related insurances, sometimes a company car allowance or company car and, sometimes in more exceptional cases, the executive will be provided with accommodation so that they can live near the organisation’s office or ground / team base (particularly if they are relocating from overseas).
Reputation
Given the high visibility of sports organisations and the extent to which the public is invested in them (in the emotional rather than financial sense), executive pay is subject to intense public and media scrutiny. This necessitates a careful balance between rewarding executives for what is undoubtedly a demanding job and maintaining public trust that they are not overpaid. High levels of pay can lead to public backlash, especially in non-profit sports organisations that rely on public or charitable funding.
Certain sports organisations publish their executive salary bands, such as Sport England, which publishes this information on its website (Salary and spending transparency | Sport England)[5]. Others publish executive salaries in their annual accounts, such as The FA, which published its CEO salary in April 2025[6]. Other sports treat executive salaries as more confidential, including football clubs and Formula One, albeit speculation is rife and executive pay in these areas is still subject to media scrutiny/debate. That said, limited information will be published on director remuneration within a UK company’s accounts, including overall director remuneration, bonuses, pay increases and the amount of the highest-paid director’s remuneration.
Regardless of whether executive pay is published, sports organisations should be able to show if required that executive pay has been carefully considered and benchmarked against the market just in case it is ever subject to scrutiny in future (including from the press or shareholders). It may also be appropriate to benchmark executive pay against other industries, as larger sports organisations often recruit individuals who are experienced in running large private and/or public companies outside sport (for example, the CEO of City Football Group, Ferran Soriano, had a successful career in business before moving into football[7]); this is unsurprising when you consider the size of certain clubs and governing bodies, for example Manchester United, which despite their performance on the pitch turned over £666.5 million for the 2024-25 year[8]. As a result, to attract top-tier talent from outside sport, clubs must offer remuneration packages that are sufficiently competitive and appealing.
Concluding comments
Executive remuneration in sport is a complex issue but, as can be seen from the above, there are some key guiding principles that should be followed. While competitive pay packages are essential to attract and retain top-tier talent, organisations must also ensure that remuneration structures are transparent, justifiable, and aligned with both strategic objectives and stakeholder expectations, with appropriate legal safeguards in place.
Ultimately, a well-designed executive pay framework should not only reward performance but also reflect the values and long-term vision of the organisation. By doing so, sports organisations can foster trust among fans, partners, and the wider community, while positioning themselves to thrive in an increasingly competitive and commercially driven environment.
This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.
© Farrer & Co LLP, December 2025
[1] Value of global sports market forecast to exceed $600 billion by 2030, finds new Kearney report | Kearney
[2] Appendix 1, Terms of Reference, Remuneration Committee, RFU
[3] UK Corporate Governance Code 2024 (last accessed 18 November 2025)
[4] Football Governance Act 2025 (last accessed 18 November 2025)
[5] Sport England, 'Salary and spending transparency' (last accessed 16 October 2025)
