Financial Conduct Authority chief executive Martin Wheatley and FCA chairman John Griffith-Jones have defended the terms under which former FSA senior management were paid a total of over £800,000 after they left the regulator.
At the FSA final annual public meeting in London yesterday, one attendee challenged the FCA board over Sants’ six months paid gardening leave, saying it left a “bad taste in the mouth”.
Speaking at a press conference after the meeting, Wheatley sought to justify the FSA’s gardening leave terms, and said the same system would continue under the FCA.
He said: “It is important to remember that by virtue of the job we do, we get access to very detailed and sensitive information within the reach of financial institutions. I do not think the industry would feel comfortable if anybody could move from that senior position immediately to a role within the industry. As much as anything it is to protect the industry that we cannot take current knowledge of very sensitive issues straight into a competitor firm.”
Griffith-Jones said: “It is appropriate to have a gardening leave provision in people’s contracts generally, I think that applies to the FCA just as it applies to other sectors. There is always a trade-off between how much it keeps to cost them on the bench for say a year, six months or at least three months.
“I personally believe six months is about the right amount. But I stress these were contractual payments. It obviously depends on how long a person serves in their job as to how reasonable it appears to the rest of the world.”
The FSA final report for 2012/13, published last week, showed that former chief executive Sir Hector Sants was paid £300,178 for six months gardening leave after he left the regulator in June 2012. Former chairman Lord Adair Turner was paid £252,000 on leaving the regulator in April, while former director of enforcement Margaret Cole was paid £250,897 after leaving the FSA in March 2012.
In total Sants was paid £530,441 in 2012/13, while Turner was paid £785,153.