DIRECTORS at UKFI, the body set up to manage the taxpayers’ stakes in the banks, have agreed to take a voluntary five per cent pay cut, in a nod to the government’s public sector austerity drive.
The pay cut for UKFI’s seven board members amounts to a saving of over £20,000 for the Treasury. Robin Budenberg, the ex-UBS banker who took the chief executive’s mantle in January, has also waived his right to a bonus for the year, meaning that none of the board members will receive any performance-related pay.
Bank of America Merrill Lynch veteran Jim O’Neil, who said last week he would move over to UKFI to take responsibility for market investments, has also taken a hit. O’Neil’s salary of £180,000 a year reflected a reduction negotiated prior to his appointment, UKFI said.
The organisation published its annual accounts yesterday, showing that expenditure for the year to end of March came in at £3.7m, of which personnel expenses were almost £2m.
UKFI has faced difficulties in retaining key staff since its inception in 2008. RBS chairman Sir Philip Hampton and Pearson’s Glen Moreno both held the chairmanship for a period, while ex-chief executive John Kingman left after just over six months. Two market investments executives, John Crompton and Tim Sykes, have also quit this year, to be replaced by O’Neil.
One of the most pressing problems for UKFI in keeping senior staff on board is the delay before it will be able to divest the government’s stakes in RBS and Lloyds, expected to be at least a year away. Chairman David Cooksey yesterday reiterated that completing UKFI’s task would “not be quick or easy”, requiring “professionalism and patience”. UKFI said it had not ruled out any options for selling down the stakes and would continue to explore alternatives, including public offers for sale.