The reward for failure: a 36% pay rise for bank chiefs

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The FT has reported:

Bank chiefs’ average pay in the US and Europe leapt 36 per cent last year to $9.7m, according to data compiled for the Financial Times, despite variable performance across the sector.

I think that's one of the most generous comments the  FT must have ever made. A sector that survives only because of massive state subsidy that underwrites all its risk abuses that subsidy to give massively overpaid people an astronomical pay rise is a better interpretation.

There is an answer, of course. That is to remove all tax releif for payments of salaries that exceed 10 times median pay in the country in which they're settled. Of course, pay splitting would be illegal between companies and countries within a group, just to make sure this was effective.

This would not stop this absurd level of pay, but it would make it much more costly and set in stone the ratio of pay levels a government thought acceptable. That would happen to be about 20: 1 with minimum pay in the UK with the maximum tax allowable pay set at £240,000or thereabouts.

There's something else that could be done too: in the UK the government could just say no to the absurd payments made at Lloyds and RBS. It's no credit whatsoever to any of our politicians that this has not happened. Even corporate investors had more courage and voted against that pay.