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FCA bosses defend £800k gardening leave payouts


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.


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There are 34 comments at the moment, we would love to hear your opinion too.

  1. Is it even worth pointing out that it is very different when shareholders are paying the cost of gardening leave as a opposed to us who have to pay it as a condition of continuing with our livelihood?

  2. Easy to say when somebody else is picking up the tab. And a reflection of just how out of touch public bodies are from the realities of the commercial world. Whether it’s the FSA, FCA, NHS the money just gets sprayed around like so much confetti.

  3. Incompetent regulators 19th July 2013 at 9:00 am

    One word. ………. Corruption

  4. Jonathan Seddon 19th July 2013 at 9:00 am

    The regulators are hell bent on stopping advisors earning a living whilst having no thought for the countless clients left without any advice. However it is perfectly justifiable for them to pay themselves £700k p.a. Who’s regulating the way they are paid?
    It would seem that the main aim of the FCA is to remove all choice for consumers whilst lining their own pockets.

  5. The FCA & FSA have a lot to answer for as they continue to interfere with Financial Adviser remuneration with the latest of their concerns over the percentage charges on Large funds. They on the other hand just take our money in fees and squander it on large salaries and pay offs for senior staff paving the way for those staff to join large Banking groups. What are they doing about NEST and the spiralling costs and fraud reported recently?

  6. This is nothing short of scandalous. These people of not CEO’s of wealth creating businesses, they are public servants and it is absolutely abhorent that the struggling IFA community is picking up the tab for these galactic payments. I repeat, this is scandalous and government needs to step in during a time when everyone else has to pay the price of austerity.

  7. every time I work hard to generate a fee it makes me sick to know how much work and effort it took generate knowing that a vast percentage will be going towards these seemingly corrupt organisations who seem to run an old boys club with a merry go around of bonuses, payoffs, new positions with related businesses, to and from the “regulator” and their associates

  8. Oink Oink! Total arrogance.

  9. “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.”

    How many ex FSA staff have done just that and been paid gardening leave to join a Bank…a Hec of a lot
    It stinks,

  10. Let not forget the FSA was deemed to have FAILED

  11. This will be the same system which is used worldwide, I was given gardening leave when I decided to leave my last job. It makes sense for the FCA to do it even more so, people ‘could’ do damage quite easily. No issues at all with the system itself.

    It’s the background info as to why there are so many for so long that is the problem, six months is a joke, mine was a month….my notice period.

    So I presume the reason it is six months is because that person had a six month notice period. In which case maybe that should be looked at instead.

  12. silver da silver 19th July 2013 at 9:24 am

    We live in a different world to that of the employees at the FCA.
    I believe the powers that be have completely lost the plot.
    Allowing the individuals to go into the private sector with their knowledge can only be good, especially if its the banking sector which has much to answer for.
    For those of us that sponsor these fools it makes you sick to think they benefit from 6 months gardening leave which is not a benefit many enjoy in our sector
    Anyone want to buy an IFA ? I’m retiring to work at the FCA

  13. Give me £500k gardening leave and I will give up my trail

  14. First, accountability.

    “In a healthy democracy, the contract with the voters is simple. I voted you in. You’re responsible for what happens. If things go wrong, I’m going to make you answer for it. And if I don’t like the answer, I’m going to vote you out. That is what accountability means.

    The problem today is that too much of what government does is actually done by people that no-one can vote out, by organisations that feel no pressure to answer for what happens and in a way that is relatively unaccountable.

    This is a big part of the reason why people feel so powerless in Britain today. They don’t have enough opportunity to shape the world around them. And it leads to the anger, suspicion and cynicism that I described in my Open University speech.

    I’m convinced that the growth of the quango state is one of the main reasons so many people feel that nothing ever changes; nothing will ever get done and that government’s automatic response to any problem is to pass the buck and send people from pillar to post until they just give up in exasperated fury”
    David Cameron July 6th 2009 in a speech entitled people power.
    I guess I will be voting you out on this one Dave

  15. Shocking is not a hard enough word!
    Do as I say not as I do!!
    Russian market place dealings by the look of this. To have the power to just request/take this money is rediculous, no wonder there is such a bad feeling about this and where is the governing on these payouts – is there any?!

  16. Let’s just remember whose money this is. It’s ours and our clients. It’s not for the failed bureaucrats of the Financial Shambles Authority to decide how it gets doled out. It is not their money. Conversely in private business such payments are perfectly correct because it is their money.

    This is just more naked cronyism.

  17. Having just returned from 2 weeks in the Aegean (from where I did manage the occasional post) it seems that we are forever condemned to have to wade through the ever present manure.

    As I posted when reports of Mr Wheatley’s remuneration was made public – it really is a waste of effort moaning. If the whole of financial services feels that the way that the regulator makes light of our hard earned subscriptions, then there should be an industry wide (not just IFAs) campaign to withhold funds until we are all satisfied that the money we pay over is handled in a responsible manner – just like any other group of shareholders would in a plc.

    Is it so outrageous to assume that those who pay are the employers and those who receive are employees? In which case perhaps the attitude of the regulator has it about face.

  18. Of course, Martin Weakly is right that “the same system would continue under the FCA”.

    How else is he to get his (un)fair share of our money.

  19. Once again we see how out of touch the regulator is. It has ruined the financial sector in this country so get paid bonuses then they gett a large payoff before getting high paid jobs else where. It stinks the country is becoming like Italy corruption every where

  20. maaria Freitas 19th July 2013 at 9:59 am

    It should be at least ,2 years before they would be able to live FCA and go and work for this peoples ,like Barclays and others who there aim is to work around rules of FCA ,And this 2 years would have to be paid by the very same who wants them , lets see if thgis Tops would want to pay them for 2 years before they could join them

  21. Regulation and all of its offspring non industries are the problem not the solution – three words

    ‘Burn it down’

    When the general population, media and even Government are appalled by bosses of Network Rail divying up £11 M to the extent that it is plastered accross the FRONT page of the tabloids imagine how they would feel about this truly appalling Quango if it was more widely accountable

  22. What a load of tosh.

    Pretty sure if ‘sensitive’ information got out that would fall into the realms of insider information.

  23. Defending the indefencable, and spending other peoples money too. I’d like to take some ‘gardenong leave’ but it seems I have to keep going to pay for someone elses……..

  24. Just over a hundred days ago, we were told that the FCA was a new entity – very different to the old, “failed” FSA.

    However, this news just goes to show how nothing’s changed and that leopards (or should I say ‘lizards’) don’t change their spots.

    Mr Wheatley – you had your chance to get us on side, and you’ve blown it.

    Plus ça change, plus c’est la même chose.

  25. Words fail me.... 19th July 2013 at 12:02 pm the never ending stories of trough snouting that defines our (to date) wholly ineffective and failed regulators. Nothing will ever change though without industry wide action, as Harry K says.
    Mind you, at least on “gardening” leave they were being paid to do nothing, which was probably a lot better for most of us than when they were paid to DO things.

  26. How about this
    Before they are employed write into the contract that when they leave they are not permitted to take another position within certain sectors of the industry within 6 months BUT no further salary will be paid.
    If they dont want the job on those terms dont hire them.
    As the merkat says Simples!!

  27. WE can take £800000.00 for sitting in the garden.
    You, on the other hand, will be villified, should you take a 1% ongoing investment charge from a £10K investment. WE are very concerned about adviser charging.
    WE do want to make sure there is enough for our troughs. WE do not want advisers to be able to lift their heads trying to make enough to sustain a living.
    WE might have to change on that one, as WE did think that the banks would have complied by now and produced simple products for the mass market.
    WE were unable to see the unintended consequence of having to produce a 40/60 page report for a simple plan, have it run through by compliance after filling in a detailed life profile of the client, down to how much he spends on sweets for his children, each month. A check on whether or not he is a possible terrorist or politically exposed person will also have been carried out, as will verifcation of his identity and address, together with his credit status.
    WE did not realise this could not be done for a tenner.
    WE will carry on with our agenda until WE have seen off every IFA that ever dared to exist.
    Please make cheques payable to;
    Everything in the GARDEN is lovely

  28. Jimmy Swaggart 19th July 2013 at 2:08 pm

    Something that has received scant attention is Martin Wheatley’s pay package. He received a salary of £420,000 a bonus of £86,000 and other emoluments of £112,386. Within the emoluments was £38,700 into his personal pension.

    No big deal you say, but this was for seven months employment. If pro-rated it becomes £1,143,574.

    This compares with Sants total income for 2011-12 of £785,153.

  29. If some of the bankers have bowed to buplic opinion And pressure why not these people.

    how many of us regularly tell our clients how much of the fees we charge them goes out to a regulator running with virtually no financial control.

    So what if they over spend they just add an additional interim charge sometimes on top of interim charges.

    Tell everyone you can, who knows it may have an effect

  30. @ Marshall
    Whenever I see a headline like this I make sure it is readily available for clients to see when they come in for a meeting.
    They almost always blow a gasket and appreciate my advice charges in a new light.
    I think I will get some of them collated, put them in a frame and hang them on the wall.

  31. Thefts, distressful amount!!!! Shameful

  32. dAphne,jenkinssmythe 22nd July 2013 at 1:53 pm

    Conduct Authority
    tommorrow the
    same thing

  33. Julian Stevens 22nd July 2013 at 7:19 pm

    “The Regulators’ Compliance Code is a central part of the Government’s better regulation agenda. Its aim is to embed a risk-based, proportionate and targeted approach to regulatory inspection and enforcement among the regulators it applies to.

    Our expectation is that as regulators integrate the Code’s standards into their regulatory culture and processes, they will become more efficient and effective in their work. They will be able to use their resources in a way that gets the most value out of the effort that they make, whilst delivering significant benefits to low risk and compliant businesses through better-focused inspection activity, increased use of advice for businesses, and lower compliance costs.”

    Clearly none of that forms any part of the FSA’s thinking when it comes to fully paid gardening leave for departing senior executives. Or in any other spehere of regulation, come to that. Change the contracts.

  34. It is interesting to compare these contracts with those of our staff before we recently updated them. There was a gardening leave clause during which our staff were to be paid for the same reason as Martin Wheatley has pointed out. OK, it was much shorter but the principle was the same. When you are a senior manager at a large organisation the figures and terms are bigger. That is life. I am not easy with it but the umbrage expressed herein is a little difficult to understand. Is it right to stop someone working, earning a living using their knowledge and experience and not pay them during that time?

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