Advisers have called increases in senior pay at regulatory bodies “shocking” after the FCA’s annual report revealed chief executive Martin Wheatley received a total pay packet of £610,000.
Wheatley’s basic salary rose from £430,000 in 2012/13 to £460,000 in 2013/14.
His total remuneration package actually fell from £667,000 to £610,000. However, this was down to Wheatley delaying taking his bonus over the regulator’s handling of the announcement of its closed book review. Last year his bonus was worth £86,000.
The FCA made a loss of £29.3m in 2013/14, largely driven by losses connected with the defined benefit pension scheme inherited from the FSA.
The Financial Ombudsman Service also published its annual accounts last week, which showed total pay for the executive team has risen by 20 per cent, climbing from £1.4m in 2012/13 to £1.7m in 2013/14.
FOS interim chief executive and chief ombudsman Tony Boorman, who took over the role in December, earned total remuneration of £293,406 for 2013/14.
He earned a base salary of £235,964, pension benefits of £24,010 and other benefits worth £33,432, which includes use of a flat in London Docklands and a relocation allowance.
His total pay is 15 per cent higher than the £255,205 he earned in 2012/13, when he was deputy chief executive and chief ombudsman.
The FOS reported a pre-tax surplus of £112.6m for 2013/14, compared to a pre-tax deficit of £23.4m in 2012/13.
Highclere Financial Services partner Alan Lakey says: “I assume Wheatley will be let off the hook over the closed book probe, so if he receives a delayed bonus his pay will be around £700,000, which is shocking.
“The FCA and FOS are not accountable to anyone which is why this excessive pay is allowed to continue unchecked.”
The Money Advice Service’s annual review, published last week, shows staff costs have increased by over £4m to £12.9m in 2013/14. Costs rose by 56 per cent from £8.3m in 2012/13.
The MAS has increased staff numbers by 28 per cent over the year, from an average of 76.1 full-time employees to 97.7 full-time employees.
It also spent £6.2m on contract and temporary staff in 2013/14, up from £1.9m, which it says reflects the use of contractors to deliver digital products.
MAS chief executive Caroline Rookes received a total pay package of £163,000, including a base salary of £141,000, other benefits and bonuses worth £8,000 and a pension worth £14,000.
Investment Quorum chief executive Lee Robertson says: “Wheatley is doing a very high pressured job so his pay does not seem out of kilter with his responsibilities.
“The MAS’ spend is far harder to justify, however. It continues to increase spend on staff, and spends a ludicrous amount on technology, without any evidence of beneficial outcomes.”
Harry Katz, principal, Norwest Consultants
“Wheatley has a bit of a poisoned chalice. The Treasury and Chancellor Geroge Osborne just go on their merry way making policy without first consulting with the guy they hired to clean up any mess. Auto-enrolment is a simple example. Wheatley is charged with ensuring that people save – it is a pretty thankless task. He gets kicked from all directions.”
Chris Hulme, co-founder, The Clayton Hulme Partnership
“I don’t believe anyone has an issue with people being paid for getting a good job done. But here we have an organisation that has failed miserably in its various guises over the last 30 years of regulation. What sticks in people’s throats is the “Do as I say, not as I do” nature of things. The only people picking up the bill for failure and the regulator’s bonuses is the client.”
FCA, FOS and MAS accounts – in numbers
£221,000 – The total pay packet received by MAS marketing and service delivery director Karen Broughton in 2013/14. Broughton, who is the MAS’ highest-earning director, leaves the organisation in September
£30,000 – The pay rise received by FCA chief executive Martin Wheatley in 2013/14, despite deferring his bonus over the botched announcement of a review into the insurance industry
£1.7m – The total pay for the FOS’ executive team in 2013/14, up by 20 per cent from £1.4m in 2012/13
£6,508 – The amount claimed in expenses by FOS principal ombudsman and legal director Caroline Wayman in 2013/14, including a flight to attend an educational programme in California
£29.3m – The loss made by the FCA in 2013/14, largely driven by losses connected with the defined benefit pension scheme inherited from the FSA