Incoming Barclays chairman Sir David Walker has called for more transparency on City wages, telling a special parliamentary commission that banks – along with other major companies – should publish numbers of their staff who earn more than £1m.
Walker had originally formed this view in a 2009 review of banking governance that he carried out for Gordon Brown’s Labour government – but softened his position when the Coalition came to power, saying that only the pay of the Top Five highest-earning, non-boardroom executives should be revealed. He has now switched back to his previous position, telling a new parliamentary commission on banking standards that the Top 50 to 100 highest-paid bankers should be made public – albeit, still under the shroud of anonymity.
However, almost certainly bearing his future employment in mind, Walker suggested that a unilateral approach from any one company – or the banks alone – would not work, and that it would require an across-the-board adoption. Critics have argued that transparency over and above that which Walker proposes is required, and that numbers of staff in all bands of pay should also be made public to reveal clear comparisons between remuneration at the top and the bottom.
A further Walker recommendation was that bonuses should no longer be linked to sales targets – an approach that the banker dubbed short-termist, and “hugely damaging” to investment banks. Bonus culture and its attendant moral hazards – reward for gambling and winning, and no punishment for gambling and losing – has still not been addressed fully by legislation, he said.
It remains to be seen whether the commission will propose action to address this issue, or endorse Walker’s transparency proposals. But there is no doubt that much work is required to restore public faith in the banking world.