Fame seems more appropriate than extra XP, which can remain sort of tied to threat level.
AI champions and sovereigns aren't necessarily that dangerous, anyway, especially once they've been injured a few times or the sovereign's been defeated a couple of times and his side's mana pool has been drastically cut. Giving an automatic XP bonus just for their presence would make farming enemy champions viable because they can't actually die unless the AI decides they've finally been crippled into uselessness and uses Steal Spirit on them, and I don't know that the AI ever does.
Not too impressed by AI-controlled city garrisons. The city troops are not terribly experienced, aren't pre-buffed with Nature's Cloak or Evasion or whatever (not even existing until the battle), tend to have iffy magic resistance (a dragon can solo cities often, just from fear giving such an edge; confusion, contagion + curse, Mass Curse, Pandemonium, Titan's Breath, other nasty approaches abound against troops with unremarkable magic resistance, which they'll probably have unless there's a magic-resistance-path Defender in town), guardian wind greatly hampers arrow fire (and there's no way for a defending mage champion to dispel such an enchantment, either)... I had an champion-heavy numerically small but heavily enchanted army with ~150 attack/120 defense (total) and no summoning magic utterly destroy Yithil garrisons with 700+ attack because the garrisons couldn't deal well with the chokes on city maps and they couldn't bring all their melee weapons to bear at once, nor were they prepared to deal with the odd fireball.