Bank Governor's pay frozen for five years: 35,000 pounds rise, then no more for Eddie George until 1998

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The Independent Online
EDDIE GEORGE, the new Governor of the Bank of England, will have a pay rise of about pounds 35,000 to just over pounds 200,000 a year when he takes over the job in July from Robin Leigh- Pemberton.

But this will be followed by a self- imposed five-year freeze 'as a personal statement of his commitment to control inflation', the Bank said yesterday.

The Bank's executive directors have also had their pay frozen this year at last year's level.

The new Governor's pay rise of nearly pounds 700 a week is entirely the result of Mr George's elevation to the governorship from his present post of deputy, combined with his decision not to follow the present Governor in waiving a chunk of his official salary.

The rate set from January 1992 for the job of Governor by the Bank's remuneration committee of non-executive directors is not being increased.

After a public uproar about a 17 per cent rise in 1991, Mr Leigh-Pemberton gave up pounds 34,135 of his earnings in the year to last February.

As a result he took home pounds 164,311 in 1991/2 - pounds 599 less than Mr George's salary as his deputy - instead of the pounds 198,446 he would have earned if recommendations of the remuneration committee, chaired by Sir Adrian Cadbury, had been accepted. This would have been a 28 per cent increase to give the Governor comparability with the private sector, but instead he took 6 per cent.

The Bank refused to say whether Mr Leigh-Pemberton had continued the waiver in the year ended this February.

It is in any case Mr George who will be reaping most of the benefit of the decision by the remuneration committee, taken 18 months ago, to award Mr Leigh-Pemberton a large pay rise.

But whereas the present Governor is a country landowner with a large family estate in Kent, Mr George is a Cambridge-educated economist who lives modestly in Dulwich, south London.

A Bank spokesman said the present Governor's pay was fixed in January 1992, was not increased at the regular review date in January this year and would remain the same under Mr George's governorship until 1998.

The Bank added: 'This is being done at his personal request. He will take his salary as recommended by the remuneration committee. The committee has encouraged him not to waive as that would make nonsense of what they do.'

Staff other than directors may get a small pay rise in negotiations that start next month. The Bank said it expected settlements this year to be 'consistent with the Government's 1.5 per cent public sector pay norm'.

The Banking Insurance and Finance Union, meeting in Llandudno yesterday, overwhelmingly rejected the 1.5 per cent pay norm.

An added complication that is bound to confuse the issue next week when the annual report is published is that the Governor's salary is set by the calendar year but his earnings are for the year to February. This has made it hard to discover his actual salary in any year or his pay rises.

Indeed, the arithmetic means that despite the freeze on the Governor's nominal salary - before waiver - since January 1992 the report will show an increase in the actual level of pay of both the Governor and his deputy in the 12 months to February 1992.

However, this year for the first time their reported earnings will be the same as their salaries because the freeze covers the whole financial year.

The Bank said the Governor's salary would be nearer pounds 200,000 than pounds 230,000.

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