The UK’s Financial Conduct Authority (FCA) is putting its annual report about. Therein lies some interesting information, especially on the way that the UK finance regulator pays its own staff.
Firstly, there are some employees at the FCA who are on less than a living wage. The lowest paid FCA staff member earned £17,287 ($27k) last year. The London living wage is £9.15 an hour, which equates to an annual salary of around £18k. The regulator looks parsimonious, although it was at least more generous than the previous year when its lowest paid member of staff only earned £16k.
Secondly, the FCA awarded it’s senior staff some impressive pay rises last year. Although the regulator stresses that there were ‘no automatic salary increases or incentive awards,’ there were plenty of discretionary ones. As the chart below shows, the FCA’s executive committee members received increases in their total compensation of between 7% and 44%, with the biggest rise going to Tracey McDermott, the FCA’s head of enforcement. McDermott is now earning £475k, up from £329k last year. The increase is partly down to the deferral of last year’s bonus to this year.
Meanwhile, Martin Wheatly, chief executive of the FCA received a salary of £460k, a bonus of £92k, and other benefits (car and driver) of £108k. Another, unnamed director, earned £660k.
So far, so generous, but if you don’t work for the FCA, the most interesting thing about the regulator’s report is its measure of equitability.
Last year, the FCA says median pay at the regulator was £63.4k and that the highest paid director earned 10 times this amount. Banks in the UK may want to take note European lawmakers have in the past suggested capping internal pay differentials at banks as a way of restricting pay.
Last year, Goldman Sachs International paid its staff in London a mean average of £363k while Lloyd Blankfein earned at least $24m (£15m), suggesting that Goldman’s London staff would need a pay rise of more than £1.1m to match the FCA’s internal pay differential (and likely even more given that the median is usually lower than the mean). Then again, Lloyd Blankfein could always take a pay cut.