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FSA annual report: Sants declines bonus – fines rocket 520%

The FSA’s annual report has revealed that chief executive Hector Sants has declined a £130,000 bonus and that financial penalties have skyrocketed 520 per cent from £4m to £27m over the past financial year.

Sants’ total remuneration was £623,170, while chairman Lord Adair Turner was paid £246,546 including benefits, between September 2008 and the end of March 2009, but was not eligible for a bonus.

There was a £10.6m shortfall between the £324.4m collected by the FSA in fees and its net expenses of £335m for the year, even though fees raised were up 7 per cent from £303.3m in 07/08.

The regulator secured an extra £100m in credit from HSBC, on top of the existing £100m facility it has with Lloyds Banking Group, in order to pay for IT development and the increased expenses it expects to incur delivering outcomes-focused regulation.

The FSA’s pension deficit stood at £88.9m at the end of 08/09, a reduction of £2.7m on last year.

The number of regulated firms dropped 3 per cent from 28,325 to 27,340 and a record 58 individuals were banned from carrying out regulated activities by the FSA for unacceptable conduct compared to the year before.

The number of approved persons decreased from 172,077 to 166,420.

Enforcement costs during the year were £35.8m, up from £29.4m 2007/08.

The report also reveals that staff costs like training, recruitment and pension deficit contributions, were £3.2m higher than budgeted for in the year, mainly due to extra contractors drafted in for supervision – although the FSA says this spend was recouped elsewhere.

The FSA increased its supervisory staff over the period from 526 to 703.

Former FSA director Sir James Crosby, who resigned in February after adverse
press surrounding his tenure as HBOS chairman, earned £63,250 in 08/09, up from £42,726 in 07/08.

Crosby attended nine out of the 12 FSA board meetings over the year.

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Comments

There are 8 comments at the moment, we would love to hear your opinion too.

  1. Value for money?
    The industry in decline while the cost soars, I suppose it is value for money if you are a political animal with a desire to lay waste to private pension provision. It can only get worse.

  2. FSA annual report: Sants declines bonus – fines rocket 520%
    Nice work if you can get it. With a total remuneration package of £612,000, it’s not too hard to waive one’s bonus as a gesture of contrition. John Tiner never did! What about all the bonuses that were actually paid to various other people within the FSA? What were they for? Who decided who should get what? Was there any sort of external monitoring of the decisions taken by the FSA’s bonus committee? Come to that, is there ever any external monitoring of anything that the FSA does?

  3. Poor Hector
    Sants should have to give the industry an audit trail of his duties in return for his £623,170. What did he do to deserve it, apart from failing to regulate the banks? Did he turn up at a few meetings, appear before the treasury select committee, act like a bogey man telling everyone it was time to be afraid of the fsa? Who would care if no bonus was available? with a salary of this magnitude who needs a bonus. No doubt Sants will say he does not earn as much as those in business blah blah blah. It may interest him to know that the rest of us struggle to make ends meet with the ever increasing costs of feeding the insatiable monster.

  4. Sants leads the way
    Fair play to big Hector – he’s doing a tough job in the current environment, and to then decline his bonus shows a refreshing commitment. I know of few people who would decline their annual bonus, regardless of whether they’d done a good job over the past 12 months or not. Would you?

  5. leads us where-the road to nowhere most likely
    I know of few people who are offered a bonus,
    especially one of this magnitude, on top of a salary most of us can only dream about.

  6. Crosby’s pay cheque…
    At £7000 a meeting I would say that’s not a bad earner for Mr Crosby. 63 grand for 9 days work we can only dream of.

  7. FSA Rip off
    How very obscene these salaries are.

  8. FSA bonus culture
    So Hector Sants feels so contrite about the FSA failings that he is foregoing his bonus. Thats good but, as he feels so strongly that the FSA has fallen down on the job, why has he not cancelled all bonuses at the regulator? Come to think of it why should any public sector body be paying bonuses at all? Excellent employment packages and little to no chance of being sacked for failure, instead a bonus just for turning up for work. Bonuses are supposed to be for ‘outstanding performance’ which presumably means performance ‘substantially better’ than than expected and required by the job. How can failures on such a massive and widespread scale accommodate any bonuses at all.
    If Mr Sants wants regulated firms to be ‘very afraid’ of the FSA then he needs to get his own house in order. Instead of charging around trying to look busy and tough he should take a strong line with his own organisation and clear out those who fell down on the job instead of crowing about how much the fines have gone up and how many individuals he has ‘de-authorised’.

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