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Britain can lead the way in ending this City 'omerta'
Jonathan Prynn, Consumer Business Editor16.07.09
In the City, bragging rights extend to pretty much anything: the value - and number - of your homes, the cc of your Ferrari, the regularity of your dining at Michelin-starred restaurants.
But one subject always has to stay under wraps - the size of your bonus.
Today's proposals from Sir David Walker would end that bonus omerta once and for all. The big investment banks would, for the first time, be required to disclose the pay and bonus paid to employees earning more than directors. In the biggest banks this could be hundreds of employees.
In theory, there would be no names, no pack drill. In practice the identity of the very highest earners would emerge very quickly.
At Barclays for example, it would not take long to work out that the employee whose pay fell within the £40 million-£45 million pay band was its fabled deal maker Roger Jenkins. HSBC already has to make similar disclosure in its accounts, because of Hong Kong accounting rules, and it took only hours before the names of its two highest-paid but supposedly anonymous employees came into the public domain.
Many in the City fear that once the Pandora's box is opened there will be disastrous consequences. One reason why revealing your bonus can be a sacking offence is to keep a lid on envy. Another argument is that it will encourage the flight of bankers from London to other financial centres where details of pay remain a matter for employer and employee. Just as the clumsy Sarbanes-Oxley Act that followed the Enron scandal boosted London at the expense of New York, so the Walker proposals will boost Geneva and Dubai at the expense of London. Or so the argument goes.
In practice such is the post credit crunch mood of the global community, a sense that Britain is leading the way may work to the City's advantage. President Obama is unlikely to resist a similar system for Wall Street.
Bonuses may be back, but that does not mean anyone -apart from lucky recipients - is happy about it. It is impossible to end the bonus culture, but given the role "irresponsible" bonuses played in bringing about the recession, knowing how much is being paid is surely the least we can demand.
