FSA comes in under budget in its final year

The Financial Services Authority (FSA) was £8.2m under budget in its last year of operation before being replaced by the Financial Conduct Authority (FCA).

The abolished regulator had a net expenditure on ongoing regulatory activities of £528.2m for the year to April 2013. This included sundry income of £40.6m, which reduced expenditure by £14.8m more than the budgeted £25.8m, helping it come in under budget.

The FSA’s highest cost for the year related to staff pay and pension contributions (see graph, below). The regulatory body spent £380.7m on funding employees, £15.4m more than it had budgeted. In its first and last annual report, the FSA said this was mostly owing to a one-off pension contribution of £22m to reduce the pension scheme deficit before it was transferred to the FCA.

Included in these staffing costs was remuneration for chairman Adair Turner and executive directors Hector Sants (pictured) and Martin Wheatley. This came to a total cost of £2m for the year to April 2013, compared to £1.7m for the previous 12 months.

Turner received £446,250 in salary for the year to April 2013, but also received £252,000 in compensation for the termination of his contract when the FSA was abolished. The FSA said this was as he was “restricted in respect of taking employment for a period of six months from April 2013” as his contract was due to expire in September 2013 and as such could not seek work elsewhere until the end of this fixed-term contract.

Sants also received compensation of £300,178 in addition to his salary of £184,615. The former chief executive left his post at the FSA at the end of June 2012 and received the compensation for gardening leave lasting for six-months after his resignation.

FCA chief executive Martin Wheatley received a salary of £429,999 for the year to April 2013, but a performance related bonus of £86,000 as well as pension contributions and other benefits increased his total remuneration to £667,085 for the year. This is a two-third rise on the £399,657 he received for the previous year.