Independent review says RFU bonus scheme was appropriate

LONDON – An independent review of the Rugby Football Union’s (RFU) controversial scheme that handed chief executive Bill Sweeney a £358,000 (S$604,000) bonus found that it was “appropriate and well-reasoned”, but also identified some key failings, largely in terms of communication.

Sweeney was paid £1.1 million for the 2023-24 financial year, comprising an increased salary of £742,000 on top of the figure awarded via a long-term incentive plan (LTIP).

Further bonuses totalling around £1 million were paid to five other executives, even though the RFU reported a record operating loss of £37.9 million and made more than 40 staff redundant.

The figures caused uproar throughout the game and the RFU will now hold a special general meeting on March 27, after more than 100 clubs and other bodies signed a letter demanding it.

The governing body employed legal firm Freshfields to review the LTIP plan and, though it said several areas that caused consternation in the game were beyond its remit, it broadly recognised that the scheme was similar in scope to plans used in other organisations as a tool to keep executive staff on board.

“In our view the LTIP was an appropriate remuneration structure for the RFU to introduce in 2021, given the RFU’s objectives at that time,” said the report, which was released by the RFU on Feb 13.

“Those objectives included (i) improving the RFU’s performance (both financial and non-financial) following the challenging Covid period, (ii) retaining the existing team of executives who were needed to achieve such improved performance, and (iii) anticipating the challenges the RFU would likely face in recruiting talent.”

The report, however, was critical of how the RFU communicated with its council and other stakeholders, both about the provision of the scheme and the metrics its recipients would be measured against to determine how much money they would receive.

“The lack of awareness of the key details of the LTIP on the part of council members demonstrates that there was a marked lack of consideration given to communication,” the report added.

Freshfields also said it had come across concerns about the potential reputational damage such payments might cause, particularly when paired with the RFU’s record loss, announced last November.

It recommended that the “RFU Executive Remuneration Policy should be made public to provide greater transparency and accountability, and enable the public and stakeholders to have a realistic understanding of the standards by which remuneration is governed and set”.

RFU president Rob Udwin said: “We are pleased the report recognised the design and implementation of an LTIP and its vesting were appropriate in the circumstances. 

“There are some specific recommendations and wider observations on the governance structure... and the communication routes.

“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.”

Sweeney is currently on a national roadshow alongside interim chairman Bill Beaumont, trying to drum up support at clubs ahead of the special general meeting in March. REUTERS