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Thursday, 2 May 2013

A Thumping Pay Rise For Central Bank Non-Execs?

I was bemused to see the call for a giant pay-rise for the Bank of England's non-executive directors earlier this week. Especially given last week's admissions by certain former central bankers that no one is in charge and they don't understand how advanced economies actually work - not to mention last year's independent findings that the Old Lady of Threadneedle Street suffers from undue deference and group-think.

Surprisingly, the argument for the pay-rise is not that inflation has increased above the Bank's own target (a bit close to home), or that the value of their work has shot up dramatically in the light of global economic events (er, it's arguably gone down). 

No, apart from an 'increased workload' (which the FT interprets as a reference to the aforementioned independent reports, prepared by others), the central rationale is that they're underpaid compared to the non-executives in other (failing) banks. Apparently it's a bit unseemly for the non-executive directors of such a grand old institution to be effectively donating their services, and a pay rise will 'boost their prestige', as the FT puts it. One "reformer" is even quoted as saying:
“Continuing to call this body the court and paying people so little conveys the wrong impression externally.” 
Fans of corporate politics might sense that someone is teeing-up the existing non-execs, like so many golf balls, ready for the new Governor to drive them into oblivion. 

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