Call for banks to disclose £1m salaries
Thursday, 26 November 2009 01:03
Banks must make public the number of employees earning more than £1 million, a report has recommended.
The Walker Review, a government-commissioned report into the way banks are governed and run, said it wants more pay transparency amongst the big banks.
And it has called for public disclosure of the numbers of employees earning over £1 million, broken down into bands of pay.
The report, spearheaded by Sir David Walker, recommended what it called 'extensive reforms' to tighten bank governance.
This included all active investors signing up to an independently-monitored stewardship code and non-executive directors to take a more hands-on role and be given greater powers to scrutinise or block big transactions.
There have been critics to the report. Vince Cable, Liberal Democrat shadow chancellor, said it did not take enough steps towards transparency.
He said: "It only deals with remuneration over a million pounds when it should relate to the level of the Prime Minster."
He added: "Transparency should relate to individuals in the way it already does to company directors."
However, Sir David stressed it was important to get the right balance when improving governance at banks.
He said: "Of course major regulatory issues need to be addressed to assure the soundness of the financial system but there will be a significant downside if the regulatory pendulum swings too far."
The British Bankers' Association supported the proposals. Its chief executive, Angela Knight, said: "The UK continues to show the way on reform, which means we now need the international community to take up [Sir David Walker's] recommendations, particularly on pay packages for senior staff."
The report also called for chairman of boards to face annual re-election and the chairman of the remuneration committee to face re-election if the report gets less than 75 per cent approval.
It recommended an induction process for all non-executive, plus regular training and for the chief risk officer to have a reporting line to the risk committee.
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