Independent panel backs RFU bonus pay

An independent review has found the Rugby Football Union's (RFU) controversial executive pay scheme, which led to the resignation of its chairman Tom Ilube, was an "appropriate remuneration structure".

The bonus scheme prompted widespread criticism of chief executive Bill Sweeney, who received an extra £358,000 on top of his increased salary of £742,000, while the union posted record operating losses of nearly £40m and made job cuts.

Sweeney's total income of £1.1m in the year up to June 2024 was significantly up from the £430,000 he received in the Covid-affected year of 2019-20 after being appointed in 2019.

His bonus in 2024 was part of a 'long-term incentive plan' (LTIP) signed off by chairman Ilube and intended to recognise the salary sacrificed by senior leaders during the pandemic, while being linked to various parts of the organisation's performance.

The review by Law firm Freshfields, which was commissioned by the RFU, has found that the structure of the LTIP "was appropriate in light of the goals it sought to achieve" and is a common tool in corporates, which has also been adopted in some other national governing bodies.

It found no evidence that the LTIP was designed with the aim of "compensating" individuals for loss of income during the Covid period, despite the RFU's 2023-24 annual report stating it was.

Criticism of the RFU's scheme has also led to a special general meeting being called for after the men's Six Nations, which ends on 15 March.

In its review published on Thursday to both the media and the RFU board, Freshfields said: "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 (LTiP) implementation."

One of the main criticisms of Sweeney's bonus was the metrics used to calculate it.

On one metric he scored 75% on "win ratio of men and women's senior teams", which was a blended percentage massively bolstered by the performance of the successful Red Roses team.

However, the review concluded: "We do not think that the apparent overlap in some of the performance conditions is problematic, and consider the metrics selected to be objectively acceptable."

It added that had the "reasonable" LTIP bonus scheme not been paid it would have had "a detrimental effect" on not only the retention of the current executives but also the RFU's ability to recruit future talent.

While Sweeney's annual basic pay has risen from £430,000 to £742,000 over the five years he has been in charge, the review found his pay was "not competitive" compared with corporate roles, even at the lower end of the FTSE 250 Index.

However, it found the chief executive's total compensation was competitive in comparison with other UK national governing bodies.

RFU president Rob Udwin said he was pleased the report recognised the implementation of an LTIP was "appropriate in the circumstances".

"There are some specific recommendations and wider observations on the governance structure, the roles of Council Members on the Board and Committees, and the communication routes between the Executive, Board, Council and wider game," said Udwin.

"It is important to recognise these, and they will feed into and inform the current Governance and Representation Review, and the Communications Review that was agreed with Council in December."