The £1m pay cut: City high-flier leaves Santander for Bank of England post


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The Independent Online

The City grandee Baroness Hogg's high-flying banker daughter Charlotte has taken a £1m pay cut to become the new Bank of England Governor's top enforcer.

Mark Carney has lured Ms Hogg, 42, from a turbo-charged career in private sector banking. She is currently running the retail bank at Santander UK on around £1.3m a year, making her one of the top eight earners there last year.

She will become the first chief operating officer of the Bank of England, on a salary of £258,809 with a pension potentially worth about £78,000 a year – small change by senior City standards.

Mr Carney, 48, handpicked Ms Hogg as his first major appointment before formally starting in the job himself next month. She is tasked with being his "eyes and ears", implementing his strategy across the vastly expanded central bank.

She will be in charge of day-to-day operations of the 3,500-strong organisation and take on the task of integrating the Prudential Regulation Authority, the successor to the former Financial Services Authority watchdog.

Coming from a wealthy political family (her mother was Prime Minister John Major's policy adviser and her father is Douglas Hogg, the former Conservative minister famed for claiming expenses to clear his moat), she was considered by observers to be prepared to sacrifice some salary to join the public service.

"It will be a fascinating role," Philip Shaw, the chief economist at Investec, said. "Although she's not senior enough to be making policy, she will be at the cutting edge as the Bank is given more power than any other central bank in the world."

One major task will be creating a new, shared culture of openness among Bank of England staff and former FSA staff. Under Sir Mervyn King, it appears there was too little communication between the Governor's office and employees.

At Santander Ms Hogg integrated Bradford & Bingley, Alliance & Leicester and Abbey and improved Santander's poor customer service record. Santander chief executive Ana Botin hired her in 2011.

She started her career at the Bank of England in 1992 before leaving for the consultants McKinsey in Washington. Senior roles followed at Wall Street's Morgan Stanley and credit checking giant Experian. Mr Carney and Ms Hogg both studied at Oxford and Harvard but at different times.

She and her husband live in London with their two children.