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David Prosser: Goldman is more open than British banks

Thursday 20 January 2011 01:00 GMT
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Outlook Whatever you think about the size of the pay and bonus awards that Goldman Sachs revealed yesterday, let us at least say this for the investment bank. In common with the rest of the US banking fraternity, it is commendably open and honest about its remuneration policies. It gave us a figure for the total amount spent on remuneration last year – $15.38bn – and a figure for the proportion of revenues this accounted for – 39.3 per cent, up from 35.8 per cent a year ago.

By contrast, anyone who looks for comparable statistics in the results presentations made by the big British banks is going to be frustrated. For all the talk of improved disclosure, working out how much our leading banks pay their staff as a whole remains an exercise in educated guesswork. Some banks are better than others – Barclays, in particular, has begun providing more detailed data – but none offer the sort of clarity provided by Goldman yesterday.

That total remuneration figure, for example, would be a useful yardstick by which to judge the banks' policies, for bonuses are not the only way in which they reward their staff. Indeed, data published yesterday by the City headhunter Morgan McKinley confirmed anecdotal evidence that banks are handing out big pay rises – senior bankers saw their basic pay rise by more than 27 per cent in the final three months of the year – to compensate staff for the smaller bonuses they will be allocated in the context of political pressure.

The banks' reluctance to name highly paid individuals might be understandable given the discomfort of staff – how many of us really want to see our salaries published? – but their lack of candour about aggregate pay is inexcusable. If we can't stop the banks paying mega salaries and bonuses, we should at least make them admit to doing so.

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