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Bankers’ pay was rarely a specific political issue before the 2007/08 financial crisis. In 1992, the Cadbury Report recommended increasing transparency and objectivity in executive remuneration overall. This ultimately led to the publication of the Combined Code on Corporate Governance in 1998.

The financial crisis focused attention on the activities of banks – and the pay of bank executives. There was a widespread view amongst the public, media and politicians that bankers’ remuneration was too high and that the way it was calculated encouraged executives to take excessive risks of the type that had contributed to the crisis. Criticism of bankers was particularly strong in the UK, given its role as a global banking and financial services hub.

Those concerns led to several reviews of pay in financial services, including those by the head of the UK regulator Lord Turner and banker Sir David Walker. Subsequent reform within the UK and the EU has both increased requirements for disclosure and limited the levels and structure of remuneration in financial services. The then-UK financial services regulator, the Financial Services Authority, introduced a legally binding Remuneration Code for UK financial services firms from 2010. Initially applicable to only 26 firms, it has since been developed and extended in scope.

The international Financial Stability Forum (now the Financial Stability Board, FSB) also published a set of principles to inform national regimes on the issue. An April 2021 review by the FSB concluded that the UK’s remuneration rules for financial services firms were broadly consistent with these principles.

Today, figures for executive remuneration in large listed banks can be found in their Directors’ Remuneration Report. Remuneration is complex because it includes several different factors, such as salary, pension, company benefits, bonuses, and other longer-term forms of payment. But listed companies are required to calculate and publish single aggregate figures for each director. For example, the 2020 annual report for HSBC shows that in 2020 its Chief Executive (Noel Quinn) received total pay of £4.154 million, of which £799,000 was a bonus.

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