The Financial Services Authority (FSA) has defended its decision to pay staff up to £33m in bonuses and pay rises this year as an essential tool to keep talented staff.
The financial services regulator announced last week it was raising the bonus pot by 2.5% to 15% of salaries for staff, costing up to £23m in total. A further £10m would become available to bring salaries in line with external jobs, the FSA said.
The decision caused outrage among opposition politicians as the FSA has been severely criticised for not doing enough to prevent the banking crisis.
But an FSA spokeswoman told Personnel Today the bonuses were modest and performance related. “The size of the bonuses we’re talking about [for each individual] is not comparable to investment bankers’ bonuses.
“The bonuses are performance related, it doesn’t mean all staff will get them. It’s ‘up to’ 15% bonus pot, it may not be any different for some and is done on a discretionary and individual basis.”
The decision to raise bonus pots is part of a new reward strategy to better link skills, performance and reward, outlined in the FSA’s business plan.
The £10m set aside for raising staff salaries, in some cases by 3.3%, was also essential to retain “people whose pay levels are significantly lower [than external jobs]”, or to “attract skills in certain areas, like technical, specialist or risk modelling”, she said. “You’re actually looking for different skills or talents to what was needed a year ago.”
A final decision on payments depends on the approval of the chairman of the FSA board remuneration committee – a position now vacant following FSA chairman Sir James Crosby’s departure last week.