Martyn Coles, principal of City of London Academy in Bermondsey, south-east London, was responding to news of the "golden handcuffs" scheme (see main story). He said schools may have to get used to competing for staff in a way that is commonplace in industry.
"There could be bidding wars with other schools - which would be distasteful, but is the reality in lots of other jobs," said Mr Coles.
Academies have always had the power to set their own pay deals, but many have stuck to national scales.
City of London Academy pays according to the national scale, but starts all new teachers on the second rung - which is worth an extra Pounds 1,581 per year.
"Lots of schools in London do the same thing," said Mr Coles. "We also give an extra Pounds 1,000 a year to teachers on our internal fast-track scheme.
"The idea of encouraging staff to stay in one school for longer is laudable.
"Turnover is fast, particularly in London. But I would have to think carefully about my school budget before offering it."