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Salary sacrifices

The recent revelations concerning MPs’ expense claims have caused a public outcry and much scrutiny by flocks of journalists.

This shabby overindulgence at the expense of others is not restricted to the House of Commons. It is common knowledge that in recent years the FSA has been fervent in its desire to be a major conserver of works of art and the giant print hanging in the FSA foyer entitled, You Got a Lotta Nerve, says it all.

We also know that Christmas parties and leaving bashes for old colleagues inflict sizeable financial dents which are easily resolved via the tried and trusted method of increasing fees and/or fines.

Interestingly, we are told that a fee rise of 30 per cent is required so that higher-quality staff can be hired and that FSA salary levels need to rise to attract the right applicants. It is therefore instructive to look at last year’s FSA salaries and compare them with other organisations.

As chief executive, Hector Sants got £417,179 basic salary augmented by a performance-related bonus of £114,000. No, this is not like commission. Please be quiet at the back. Additionally, he got emoluments totalling £130,769 which includes a personal pension contribution as well as the cost of a car and chauffeur.

Recent departure David Kenmir somehow managed on a £300,000 salary, £75,000 bonus and £24,003 in emoluments. These total figures, £661,948 and £399,003 respectively, cannot be considered paltry and they look positively generous when compared with the Prime Minister’s £194,250.

Indeed, most other Government bodies are far less generous when it comes to rewarding their chief executives. The chief executive at the Office of Fair Trading received £270,000 whereas his equivalent at Ofwat stumbled by on £178,100. The CEO at the Office of Rail Regulation received £170,000 which compared favourably with the £145,000 awarded to the CEO at the Water Services Regulation Authority. All these sums appear munificent when we see that the poor CEO at Postwatch received a trifling £100,000.

This highlights that our regulators are paid very handsomely indeed and if one ignores the incredible £2,040,000 received by the CEO at the National Grid, we see that their pay is appreciably above the norm.

Perhaps MPs have seen these pay levels and maybe their expense gathering is a vain attempt to clamber up to the oxygen-starved heights of the regulators that previously they inflicted on us.

Alan Lakey is a partner at Highclere Financial Services

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