Bankers are receiving 'Himalayan pay packages 'despite poor performance , says senior Bank of England executive
By Becky Barrow
PUBLISHED: 18:42 EST, 24 April 2012 | UPDATED: 18:42 EST, 24 April 2012
Speaking out: Bankers' pay is still at Himalayan heights while their performance is in the foothills, Bank of England executive Andrew Haldane has said
Bankers’ pay is still at Himalayan heights while their performance is in the foothills, according to a senior Bank of England executive.
In a hard-hitting speech, Andrew Haldane said top financiers were on an ‘upwards-only pay escalator’ where they cash in whatever happens to profits or their employer’s share price.
‘While bank performance has fallen off a cliff, executive pay remains close to pre-crisis Himalayan heights,’ he said in a speech published by the Bank yesterday.
Mr Haldane said the pay package enjoyed by a UK banking chief executive rose by an average of 13 per cent a year for nearly two decades prior to the 2007 credit crunch. In 1989, it was £310,000 but had shot up to £2.7million by 2007.
Mr Haldane, who is executive director for financial stability, said banks were playing a game which is ‘a case not so much of keeping up with the Joneses as keeping up with the Goldmans’.
This was a reference to the American investment bank Goldman Sachs, which has been nicknamed ‘Golden Sacks’ for the pay deals lavished on its workers.
In a separate attack, the director general of the Institute of Directors will today slam the controversial pay packet handed to the chief executive of Barclays.
The bank is facing ferocious criticism over its decision to award up to £26.6million to Bob Diamond, despite its disappointing performance.
The package includes everything from his £1.35million basic salary to a £5.75million payment toward his tax bill and the cashing in of share awards made in previous years.
Unhappy: Investors are angry at the decision by Barclays to pay out £2.15billion in bonuses last year - more than three times the £730million paid in dividends to shareholders
Investors are angry at the decision by Barclays to pay out £2.15billion in bonuses last year – more than three times the £730million paid in dividends to shareholders.
In a speech in London, the Institute of Directors’ Simon Walker will say: ‘If some banks pay three times more in bonuses to top executives than they do in total dividends to shareholders, then I think there are questions to be asked.’
FINANCE CHIEF BLASTS 'OVERPAID' BOSSES
Overpaid, reckless and incompetent financial bosses were lambasted by the City regulator yesterday.
Hector Sants, the departing chief executive of the Financial Services Authority, used his final speech to call for integrity to replace greed.
‘Should there not be some level of expectation that people entrusted with the leadership of financial services organisations ultimately are driven by the desire to do the right thing,’ he said.
‘It should not solely be about how much we earn but also how much we care for the market’s users and their well-being.’
He said ‘non-financial performance measures’ should be reflected in pay.
Mr Walker said he was pleased to see ‘encouraging’ signs that shareholders are taking a more activist approach and voting against pay deals which are excessive.
A recent report from the High Pay Commission also attacked the ‘excessive’ pay packages given to company executives, which it said had had a corrosive impact on the economy.
Within ten years, it predicts the average boss of a FTSE 100 company will be paid a record of nearly 215 times more than the average worker.
It concluded: ‘The public is rapidly running out of patience with a system that allows those at the top to enrich themselves while everyone else struggles to make ends meet.’
Last night a spokesman for the British Bankers’ Association said: ‘We are now committed to ensuring that the pay structures in the industry reflect the long-term health of the organisation that the bankers work for.’
Mr Haldane’s speech was delivered in Berlin earlier this month.
Headlines Newsview all
Ebola could hit 15 countries across Africa: Study of how disease has spread in past finds 70million people may be at risk of infection
The Ebola outbreak could hit 15 countries across Africa - putting the lives of 70 million people at risk, a groundbreaking study has found. In a ...
Britain is to forge closer economic ties with China after Chancellor George Osborne announced £2.4billion in new commercial deals with the People’s Republic. As the annual ...
Donations have poured in for Manchester Dogs’ Home after a fire ripped through the premises, killing more than 53 dogs last night. A JustGiving page set ...
Rate this article
MOST POPULAR ON CAPITALBAY
- Court showdown on flight delays as Jet2 and Thomson try to overturn rulings
- Devastated mother tells of anguish at watching teenager drown in lake tragedy not realising it was her own son
- Howzat? Lancashire County Cricket Club launches mini-bond paying 7%
Devastated mother tells of anguish at watching teenager drown in lake tragedy not realising it was her own son
A devastated mother has spoken of her anguish at witnessing a teenager drown in a reservoir tragedy, not realising it was her own son. Melanie Goodship, ...
I've had no complaints about my kissing, says Miliband as he admits he FORGOT to mention the deficit in his conference speech
Ed Miliband today insisted said his wife has 'never complained' about his kissing technique after an awkward moment during his party conference speech. The Labour leader ...
Philip Hammond was speaking to CNN at United Nations summit in New York He said the hunt for ISIS executioner with a London accent was moving ...
Man pulled four-door sedan up to security gate without putting it into 'park' Rolled right through gate while man scrambled to catch up with his vehicle Onlookers ...
This wouldn't happen in CSI! Hilarious moment road sweeper ducks underneath police cordon and starts cleaning up a crime scene closed off for forensic investigators
Amused passerby photographs eager road sweeper cleaning crime scene The woman went under a police 'do not cross' cordon to collect the litter But watching police officers ...
This nurse and single mum could be deported to the Philippines because her 9 year old son has AUTISM and will 'be a burden on the health system'
Nurse and son set to be deported from Australia due to the child's autism Maria Sevilla and son Tyrone have lived in Australian since 2007 Their family ...
Rob Greenfield, 28, saw huge amounts of food thrown away on cycling tripDecided to survive by eating only from dumpsters for a monthIs touring the ...
Karen Michelle Williams was last seen in August 1990 Friends last saw her leaving a party in the remote opal mining town of Cooper Pedy in ...
I want some! Sneaky pet pooch watches owner eating watermelon... but looks away each time he's caught staring
Man pretends to eat his food while dog tries to grab a sneaky peek Just before man eats he glances at dog and dog hurriedly turns away Pomeranian ...
Jordanian court ruled there was insufficient evidence against Abu Qatada He was linked with plans to target Israeli and U.S tourists, and diplomats Earlier David Cameron insisted ...