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
One of the richest towns in Britain also has the highest number of people having extramarital affairs, according to new research. Wealthy Maidenhead tops a new ... Full story
A trainee teacher hanged himself on New Year’s Eve after a split from his girlfriend, an inquest heard today. Keiran Walsh, 22, split from his partner ... Full story
Late on a dark and rainy night, it is all go-go-go down at White Dee’s house in Birmingham. There is a pan of fish stew ... Full story
Rate this article
MOST POPULAR ON CAPITALBAY
- Porthtowan beach ruined by 100 CHRISTMAS TREES dumped on it
- Families pay £56,000 just to keep loved ones in care as council contributions plunge by 5%
- Cold callers break Hilda's heart every time they call to ask for her dead husband
Paul Weller has won £10,000 in damages from the Mail Online, after images of his children were “plastered” across the site. The Jam frontman sued ...
More 'giant rats' appear to have been spotted, after pictures of sizeable rodents discovered in or near the homes of people across England have emerged. ...
Oscar Pistorius trial: Reeva Steenkamp standing with 'hand on the door handle' when she was shot dead
Reeva Steenkamp was standing with her hand "on the door handle" before Oscar Pistorius shot her dead through a locked toilet door, his murder trial ...
A skeleton has been found by builders underneath a driveway in Purley, south London. The discovery was made by landscape gardeners who were working in the ...
Teachers and schools should check on the holiday arrangements of pupils from communities which practice female genital mutilation (FGM), a conference was told. Delegates at the ...
Peaches Geldof dead: Australia’s Next Top Model judging role lined up for star following suicide of model mentor Charlotte Dawson
Peaches Geldof was in secret talks with the producers of talent show Australia’s Next Top Model for a high-profile judging role, following the tragic death ...
A new sort of inflatable wind turbine that floats thousands of feet above the ground could be a powerful source of sustainable, low cost energy ...
Young people who smoke marijuana may be at risk of “major” changes to the area of the brain that regulates motivation, a new study claims. Our ...
The production company behind controversial documentary Benefits Street has said it is developing a new series about immigrants in Britain. Love Productions has confirmed it is ...