City stars forced to reveal mega pay in Walker review

Plans have been put forward to make City fat cats disclose pay deals
12 April 2012

Full details of the pay and bonuses of thousands of high-earning bankers will be made public.

A sweeping review of the banking sector calls for more transparency into the pay of the biggest deal-makers.

Its author, Sir David Walker, believes that if the public and shareholders can see how banks operate, the excessive pay and risk-taking which caused the credit crunch will be curbed. Only board members including chairmen and chief executives currently have their remuneration disclosed but hundreds, if not thousands, in the Square Mile and Canary Wharf earn far more than their directors.

The rules will apply to all banks with London offices, meaning the earnings of traders at Goldman Sachs, who have an estimated £14 billion pay and bonus pot this year, will be made public.

Sir David, who is heading the Government's review of corporate governance in banking, will not "name and shame" the trader, proposing instead that their pay, bonuses and pensions be listed in bands. But City figures today said the publication would start "guessing games" on every trading floor — and some identities would be flushed out.

Among those believed to rake in vast sums below the radar is Roger Jenkins of Barclays. The super-banker, known as the King of the Double Dip for his ability to devise ways in which the wealthy can get tax relief twice, is thought to earn £40 million a year.

Sir David, the former chairman of Morgan Stanley and ex-Bank of England director, called for the clampdown "against a background of defective control and serious excess" which fuelled the financial crisis.

Sir David's review also ties bonus payments to long-term performance rather than short-term risk.

Goldman Sachs this week revealed it is likely to pay its 5,500 London staff an average of £500,000 each this year. Other banks such as Barclays are also expected to hand out lavish rewards. It emerged today that thousands of London bankers at JPMorgan were also in line for record pay and bonuses, averaging £282,000 a head.

Royal Bank of Scotland, which has received billions of pounds of taxpayer support and is 70 per cent owned by the state, is offering packages to lure or retain staff that are at or above the industry's pay peak of 2007.

The City watchdog, the Financial Services Authority, is also drawing up plans to curb excessive pay and risk-taking.

Sir David said: "Bonus schemes contributed to excessive risk-taking by rewarding short-term performance. These recommendations should bring substantial improvement in the governance of banks. They will not guarantee that failure will be avoided in future but will greatly mitigate the risk."

Vince Cable, Lib-Dem Treasury spokesman, said: "Transparency has done wonders by opening the lid on Pandora's Box in Westminster; it is high time that the City was subject to the same level of scrutiny."

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Create Account you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy policy .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in