Thursday 10th June 2010

FSA annual report reveals £108,000 bonus for outgoing chief executive Hector Sants

Article published by CityWire

Outgoing Financial Services Authority (FSA) boss Hector Sants has donated his £108,000 bonus to charity.

The FSA annual report shows the regulator increased the salary of 8.6% of its 3,150 staff and chief executive Hector Sants saw his take home pay grow to £500,000 from £478,000 and collected £134,000 in benefits. He was also rewarded a bonus of £108,000 which he donated charity.

The financial regulator increased the amount paid out in incentives by 10.1% up from the £19.7 million in the bonus pool for 2009. The pay of FSA chairman Lord Adair Turner remained fixed at £482,000 after he picked up £246,000 last year for six months work. The overall cost of boardroom pay at the FSA has fallen to £2.6 million from £3.1 million in 2009.

The FSA spent £391.7 million over the year which was £23.3 million below its budget of £415 million. Staff costs were also below budget at £305.3 million down from the £315.5 million estimate despite the FSA recruiting 537 staff over the year.

Accommodations costs for the FSA also came in below budget with £45.8 million spent versus the £46.2 million estimate. The FSA plans to close its office in 25 Bank Street and move staff into four floors it has leased at Canary Wharf Tower.

The FSA also closed its final salary pension scheme in April 2010 after consultation with staff and wrote off £5.2 million from the pension reserve. ‘We also took the opportunity to write off £5.2m from the pension reserve, with the balance of the under spend transferred to general reserves,’ stated the FSA.

The liabilities for the FSA pensions scheme have ballooned to £112.7 million from £88.9 million after being stung by corporate bonds and inflation. The FSA said it would contribute £9.8 million, the minimum amount, towards closing the deficit in its final salary pension scheme. ‘We believe that we remain able to meet our liabilities as they fall due because of our statutory power to raise fees,’ stated the FSA in its annual report.

The FSA has also doubled its spending on assistance from solicitors and accountants for enforcement actions to £7.3 million from £3.8 million in 2008/2009.

The FSA has cut back its credit facility with HSBC and Lloyds Banking Group to £150 million from £200 million. The FSA announced in February that its annual funding requirement would increase by 9.9%, or £40.9 million to £454.9 million. The FSA’s budget has grown as it recruited staff for its new intrusive supervisory regime

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