The financial penalty is fair (4)
I believe the answer is:
fine
I believe this clue is a double definition.
'the financial penalty' is the first definition.
(a payment extracted as punishment)
'fair' is the second definition.
(I've seen this before)
'is' acts as a link.
(Other definitions for fine that I've seen before include "Splendid - financial penalty" , "A financial penalty - excellent" , "Eric" , "Fee payable for misdemeanour" , "An exquisite penalty?" .)