FSA chief's pay package rises to £500,000

John Tiner, the chief executive of the Financial Services Authority, saw his bonus more than double and his salary and other benefits increase by almost 40 per cent over the year to 31 March, according to the regulator's annual report which was released yesterday.

John Tiner, the chief executive of the Financial Services Authority, saw his bonus more than double and his salary and other benefits increase by almost 40 per cent over the year to 31 March, according to the regulator's annual report which was released yesterday.

In total, Mr Tiner's remuneration package increased more than 30 per cent to £471,656 for a year in which he was chief executive for six of the 12 months - from 21 September 2003 - and an FSA managing director for the other six. Next year, after a full 12 months as chief executive, his total package will be well in excess of £500,000, even without any increases.

Callum McCarthy, the FSA chairman who also took up his position last September, received a little more than half his £314,000 salary during the year to 31 March as well as £64,638 in other benefits. Unlike Mr Tiner, however, he has declined to take part in the FSA's performance-related bonus scheme. The combined remuneration of the chief executive and chairman will be close to £1m next year. Prior to Mr Tiner's promotion, the FSA did not have a chief executive, while Sir Howard Davies was chairman. His total remuneration of £385,730 in 2002/03 was almost £90,000 less than Mr Tiner's latest package.

The annual report revealed that costs of enforcement to the regulator came in at £4m, more than 70 per cent above budget. However, this is dwarfed by the £11m that the regulator received in fines during the year.

On Tuesday night, Callum McCarthy moved to defend the FSA's enforcement division, which has come under fire recently, both in terms of its structure and the fairness of its appeal process.

On Monday, the tribunal of Paul "The Plumber" Davidson, who is appealing against a £700,000 fine from the regulator, was postponed while another panel is found to judge the hearing. The original panel was dismissed after it was revealed that its deputy chairman, Terence Mowschenson QC, had held conversations with the then head of the FSA's Regulatory Decisions Committee, Christopher Fitzgerald, after the trial had begun.

Mr McCarthy said: "I would like to make it clear the importance the FSA attaches to the Tribunal. No one should be in doubt about our commitment to the integrity of the process."

The FSA has also been criticised for its handling of its negotiations with the 21 firms involved in the split-capital investment trust debacle. The regulator is trying to secure compensation of £350m for investors who lost money in the trusts after the sector collapsed in 2001. However, it has so far failed, and looks set to face some of the companies in the Financial Services & Markets Tribunal to appeal against the penalties which the regulator is set to levy.