The Walker Review on the corporate governance of banks recommends that FTSE 100-listed banks and the largest building societies should disclose in bands the number of “high end” employees, including executive board members (whose incomes are not a secret anyway).
The bands would show the number of people taking home £1m to £2.5m, £2.5m to £5m, and £5m and above.
The report recommends that within each band, the main elements of salary, cash bonus, deferred shares, performance-related long-term awards and pension contributions should be disclosed.
The changes are expected to come into force from spring 2010 with the first yearly earnings disclosures not available until 2011.
This appears to be a watered-down version of what was first proposed. Originally, it was suggested that individuals at the high-end of the salary and bonus bracket should be named. Technically, there are still ways for these individuals to avoid such scrutiny – whether they are named or not.
The easiest, of course would be for someone earning say £1 million to resign and return the following day as a self-employed consultant or as an employee of his own company.
However, what is most worrying is that because of Gordon Brown’s failure to obtain the promised and much-vaunted international agreements, many high-earners will be able to move offshore to a less demanding regime. That way, not-only will they not have to disclose their incomes but the Exchequer will lose a substantial amount of tax revenue.
The vilification of high-earning bankers is a device by means of which government spin doctors have managed to shift the public’s focus away from the blunders and ineptitude of their masters. Paradoxically, though, the government is walking on eggshells because since the United Kingdom doesn’t make anything, the Financial Services Industry’s contribution to the country’s gross income is now of the order of 30% . Without them, the economy is finished.
The reason why Gordon Brown and his puppets have been dancing on tiptoe around the banking fat cats is because the latter are holding the former by the bollocks.
Sir David Young has worked hard on his recommendations but the mere disclosure of the incomes of a relatively-small bunch of bankers is useless because it will serve no practical purpose, except perhaps to further fuel envy among the downtrodden bank customers.
If the government does not have the moral fibre nor the will to put a cap on bankers’ incomes, they should leave them alone, let them earn as much as they wish but make sure that the next time that they screw-up (and they will) – come down on them like a ton of gold bars.
No-one has really used the F-word but there has been institutional and corporate fraud on a vast scale, yet no-one appears to have been brought to book. Several directors and Chief Execs have either resigned or been removed from their posts but there is no doubt that there were people within the banking industry who were operating illegally and yet once again, this government rocks from foot-to-foot and calls for inquiries.
Mealy-mouthed platitudes, spin-doctoring, enquiries, half-baked “threats” , “reports” and indecision don’t appear to have had much effect, so let’s hope that the 2010, 2011 or the 2012 banking crisis is dealt-with by a government with a little more courage and resolve.
Big boys’ salaries? We don’t really care.