Britain’s financial regulator, accused of failing “from top to bottom” following a series of scandals, has paid out bonuses of more than £ 125m. To its staff since 2016, Observer can reveal.
The campaigns said the payments by the Financial Conduct Authority (FCA) were an “absolute insult” to savers who had lost their life savings due to the regulator’s system failure.
FCA chief Nikhil Rathi is now proposing to scrap bonuses after two independent reviews found the regulator had acted too slowly to protect consumers. He said the payouts “had not been effective in driving individual or collective performance”.
Details of bonus payouts obtained by Observer reveals £ 125,529,590 has been paid in watchdog bonuses since 2016, including bonuses worth up to £ 45,000 each to CEOs.
In the year to 31 March 2021, £ 19.8 million in bonuses were paid out with an average payout of around £ 5,300 for those who received prizes.
These are among the largest bonus pots ever handed out in a government department or quango.
Gina Miller, the business activist and co-founder of the True and Just Campaign, which calls for a package of economic reforms for the benefit of consumers, said: “These payments are an absolute insult to people who have lost their life savings or had their lives decimated because we have a regulator that is not suitable for the purpose.
“Over the last five years, we have seen some of the biggest economic scandals due to lack of enforcement and strict regulation. Against this background, it is incredible to award these bonuses. This is an organization that has failed from top to bottom. ”
Approximately 4,200 employees work in the FCA, which is funded by the financial firms it regulates. It was chaired by Andrew Bailey, Governor of the Bank of England, from July 2016 to March 2020.
The watchdog was criticized in a judgmental report by former Court of Appeal Judge Elizabeth Gloster last December for failing to effectively monitor and regulate mini-bond issuer London Capital & Finance (LCF). Around 11,600 investors lost savings of up to £ 237 million when LCF went into administration in 2019.
Two of FCA’s top executives, Megan Butler and Jonathan Davidson, faced calls from MPs to repay bonuses of £ 45,000 each paid in the 2018-19 financial year, after being named in the Gloucester report.
The watchdog was criticized in another independent review published in December for ineffective regulation over the collapse of the Connaught Income Fund in 2012. The FCA said at the time that it was “deeply regrettable” for the mistakes made.
The guard has also been criticized for not intervening before Neil Woodford’s Woodford Equity Income Fund collapsed by $ 3.1 billion. Pound. It was shut down in October 2019 with huge losses for tens of thousands of investors.
In an FCA consultation document released to staff, Rathi said it was “increasingly difficult” to justify the bonus payments after LCF and Connaught Fund reviews found the regulator had acted too slowly to protect consumers.
He wrote: “This is especially the case when bonuses are paid to the vast majority of employees and not just those who have performed exceptionally.”
The FCA said its executives had refused to be eligible for performance bonuses in 2020-21 and it had already been decided that they would not be eligible for performance awards in the future. FCA’s salary and benefits advice runs until 20 December.