Wage restraint begins at the office
Bank of England Governor Mervyn King turned down a recommendation that would have seen his paycheck swell by around £100,000 (€125,457) this year, the central bank's annual report showed Monday.
King got a 2.5% automatic pay bump in July 2007, bringing his salary to £290,653 (€365,341) from £283,564 (€356,734).
A 2006 compensation review carried out by the central bank's pay committee, assisted by consulting firm Towers Perrin, found that the governor's salary "was low for the size and responsibilities of the role, although the pension contributions were generous."
European Central Bank president Jean-Claude Trichet earned €345,252 ($549,275) in 2007. US Federal Reserve chairman Ben Bernanke's 2008 annual salary is $191,300.
The committee recommended a higher salary but lower pension benefits, with the changes to be "cash neutral." The committee said the governor should receive salary between 375,000 and 400,000 pounds a year, with automatic increases of 2.5% a year and a pension contribution between 15% and 30% of salary.
King, upon appointment to his second term as governor in January, was eligible for the terms of the new package, but he "declined to accept the new remuneration package and retained the salary and annual increases which applied during his first term," the report said.
King's pension was "fully accrued" at the end of his first term in June 2008, and he will earn no annual pension contribution from the bank during his second term, the report said. King has accrued a pension worth around £4.8m, the report showed.
William L. Watts is a reporter for MarketWatch in London, a Dow Jones publication.
-- Write to BWatts@marketwatch.com
del.icio.us
Digg
Newsvine
reddit
StumbleUpon
