Schools are offering head teachers five figure "golden hellos" as the shortage of good candidates continues to bite, education experts say.
The role of a head teacher is increasingly demanding
Governors are devising increasingly attractive packages, and some are using head-hunters, to find the right person.
The Times Educational Supplement says a school in Haringey, north London, offered its head teacher £40,000 to come on board - against council advice.
The Association of School and College Leaders said things would get worse.
General Secretary John Dunford said the £40,000 inducement reportedly offered by Fortismere school in Muswell Hill was the highest golden hello he had heard of thus far.
Head teacher Aydin Onac defended his pay package saying: "All payments made to me are in line with my contract of employment, specifically approved by Haringey Council.
"The package was, in fact, similar to, or substantially less than, that being offered to prospective heads of the new academies.
"I believe that experienced head teachers, managing organisations of some 2,000 staff and students, responsible to 3,000 to 4,000 parents as well as local communities, should be appropriately remunerated if we are to attract quality people to this most challenging of roles."
Dr Dunford said the shortage of head teachers would be at its worst in two years' time.
"The post-war baby boomers are retiring and the generation of teachers behind them is much smaller in number.
"There is no question that we will see a lot more of this.
"The governing bodies will have to set out their stalls much more attractively, offering high salaries and golden hellos to attract head teachers to more challenging schools."
And high achieving schools, like Fortismere, would also struggle to fill posts, he said, because many candidates would be put off by the difficulty of raising standards still further.
This view was backed up by education recruitment expert Professor John Howson who said head teacher retirements were due to peak in two years' time.
He said house prices, particularly in London and south-east England, were also to blame.
"Why would someone living in a four bedroom detached house in London want to come to live in a very expensive part of north London?
"The government is offering key workers a £150,000 tax-free loan for house purchases but I am not sure what the take-up is."
Head-hunters were increasingly part of the education recruitment scene, he said.
"If you go to any education show or conference today you will find a number of large head-hunting firms offering their services."
Haringey Council's director of Children's Services Sharon Shoesmith wrote to Fortismere School when the matter emerged some months ago questioning whether "a payment of this magnitude" was a "proper use of public money".
She added: "I have to say that I do not and, should you decide to proceed, this has to be in the knowledge that it is against my advice."
A council spokesman said: "We gave our advice but it is a matter for the school."
A survey in 2006 suggested only 4% of teachers wanted to become heads, but the Department for Education and Skills said vacancy rates for head teachers had fallen.
A spokesman said: "We have increased pay to reward heads, introduced reforms to help them manage workloads, slashed the bureaucratic burden on them and brought about changes to promote leadership so they have the skills needed."
The maximum pay for a London head teacher has risen to £102,000, he added.