Bonus Culture and the FSA

Big city bonuses are bad, aren't they?

So bad that the Financial Services Authority felt compelled to draft guidlines about bonuses.

Specifically they say:

The need for firms to offer competitive remuneration packages is recognised, but industry comparators should be a secondary rather than a primary factor in the determination of remuneration policies.

From FSA Code of Practice

So we shouldn't look outward at other companies for salary comparison.

Regulators at the Financial Services Authority are in line for pay rises totalling up to £10m as part of a concerted effort by the City watchdog to attract and retain the highest calibre of staff.

Hector Sants, chief executive of the FSA, said its board had agreed to the extra funds to make the salaries comparable to those on offer in the City. Firms the FSA regulates face steep rises in the amount they will pay to be supervised.

From: The Guardian

Do as we say, not as we do.

So the FSA are making pay awards by looking at other companies for salary comparisons? When pushed on these double standards they responded by saying

We are not a commercial company so some parts of the code will not apply to us. Where we feel it is applicable, we will follow it.

Its nice to think that in a time of recession the FSA is increasing fees to advisers which will have to be passed onto consumers. Its about time they came out of their ivory tower and took a look at what is happening outside.

Suggestions for what the letters FSA could stand for are welcome on a postcard. (I'm struggling to think of any that don't involve expletives)