RFU's Executive Pay Scheme Deemed Appropriate Amidst Controversy

Independent Review Clears RFU’s Executive Pay Scheme

An independent review conducted by law firm Freshfields has found that the Rugby Football Union’s (RFU) controversial executive pay scheme was an "appropriate remuneration structure." This finding comes despite the scheme facing significant criticism after the RFU recorded nearly £40 million in operating losses and made job cuts.

Controversial Bonuses and Criticism

The scheme, which included a long-term incentive plan (LTIP), led to the resignation of RFU chairman Tom Ilube. Chief executive Bill Sweeney received a bonus of £358,000 on top of his increased salary of £742,000, bringing his total income to £1.1 million for the year up to June 2024. The LTIP was intended to recognize the salary sacrificed by senior leaders during the COVID-19 pandemic and was linked to various performance metrics.

The review found that the LTIP was a common tool in corporates and was implemented with the post-COVID recovery in mind. It concluded that the scheme was appropriate, stating, "We understand that the impact of COVID on the RFU’s business and the consequent importance of the post-COVID recovery period were the driving factors for its implementation."

Key Findings and Recommendations

The review found no evidence that the LTIP was designed to compensate individuals for loss of income during the pandemic. However, it did make several recommendations, including greater transparency in the RFU’s Executive Remuneration Policy and improved communication with the council, which represents the wider game in England.

RFU president Rob Udwin welcomed the report, stating that it recognized the implementation of the LTIP as "appropriate in the circumstances." He added that the recommendations would feed into ongoing governance and communication reviews.

Future Implications

The review also highlighted that the LTIP was crucial for retaining current executives and recruiting future talent. It noted that Sweeney’s pay, while not competitive compared to corporate roles, was in line with other UK national governing bodies.

Meanwhile, former World Rugby chairman and England captain Sir Bill Beaumont has stepped in as interim chairman until a permanent replacement is appointed.

The Whole Game Union, which organized a call for a special general meeting, expressed concerns over the report, suggesting that it appeared to justify corporate behavior within a registered society. The group emphasized the need for greater accountability and communication with the broader rugby community.

Conclusion

The review’s findings have provided some clarity on the RFU’s executive pay scheme, but it remains a contentious issue within the rugby community. The RFU will need to address the recommendations and rebuild trust with its stakeholders to ensure the long-term success of the sport.