The day has come. Mervyn King has gone off to practice ballroom dancing and Mark Carney is upon us. Today is the day that the new governor is officially instated at the Bank of England. We are all saved. Hallelujah.
But while the UK as a whole has much to hope for from the manifestation of Carney the saviour, the Bank’s own staff could find their new man harder to digest. For all the hagiographies, Carney is human – he can reputedly be difficult and prickly. He’s arriving on an enormous package at an institution where costs have been tightly controlled for the past three years. Carney is the essence of exceptionalism. It’s easy to see why the Bank’s staff might be a bit pooped off.
Writing in the Financial Times, Gavyn Davies pointed out at the weekend, that Carney will have more power than any Bank of England governor since 1945. The reorganization of the financial regulatory structure in the UK has given him responsibility for regulatory and prudential authority over the banking system, as well as bog standard monetary policy.
For this, Carney is being paid a package of £874k. This is fifteen times larger than the £61k that the Bank of England pays each of its 2,173 employees on average. According to the Bank of England’s most recent report, only three unnamed people below director and governor level earn more than £160k. Charlie Bean and Paul Tucker, the current deputy governors who are just one rung below Carney each earned £250k each last year.
Carney’s pay suggests the entire Bank of England compensation system needs to be rebased – or that he simply needs to be paid less.
Carney’s pay is not simply a question of quantum, however. It’s also a question of culture. While Carney has proven himself determined to extract as much as possible for his services from the British taxpayer, he is joining an institution with a culture of financial self sacrifice. – Mervyn King actively requested that his salary should be frozen at the level it was in 2010. The governors and deputy governors did the same, refusing the 1% pay increase they were offered in March 2013.
Carney’s dilated package makes a mockery of such thriftiness. In a situation where everyone was working hard to reduce carbon emissions, he would be the coal fired power station running 24 hours a day, seven days a week.
Needless to say, there’s a reason Carney’s being so bountifully rewarded: he’s the avatar who’s supposed to bring about Britain’s economic redemption. Last November, George Osborne heralded him as, ‘the most outstanding central banker of his generation.’
How big is Carney’s ego already? For the cynical, there are signs that it’s burgeoning. Carney is bringing his own PR man from Canada to work with him – suggesting a pseudo-Stalinist concern with self-presentation. According to the Financial Times, he lashed out at a journalist who reasonably dared question policy differences between he and Sir Mervyn for being ‘very, very, very sneaky.’ Is this a man who likes hyperbole and won't tolerate dissent?
So what should modest, self-effacing, lowly paid Bank staff do when they turn up at Threadneedle Street today? A historic Harvard Business Review article titled ‘Envy at Work’ offers some helpful pointers, both for Carney’s minions and anyone else with a demi-god as a boss.
1. Don’t become overwhelmed with negative feelings. If you obsess about someone else’s success, both your self-respect and your own performance will suffer.
2. Don’t try and distance yourself from the deity. The Harvard academics came across one senior investment banker who was so envious of a colleague’s power that he refused to communicate except through a go-between, thereby isolating himself and alienating the star.
3. Do try and work out what makes you envious. Recognize your own envy and your insecurities. What can you do to amend the areas where you feel insecure and inadequate? Focus on self-improvement.
4. Don’t compare yourself to the superstar, do compare yourself to yourself. “Try measuring your present self against your past self,” suggest the academics.
5. Affirm yourself. Spend some time telling yourself how wonderful you are. Think of your own accomplishments.
If all this fails, there’s one other alternative: leave. Paul Tucker is unlikely to be the only person who decides Carney’s light is just too bright to handle.