Bank of Canada Governor Mark Carney will receive an annual housing allowance of £250,000 (just over $400,000) when he takes over the top job at the Bank of England next summer, bringing his total annual compensation for the position to roughly $1.4 million.
In addition to his housing allowance, Carney will receive an already reported annual salary of £480,000 ($770,400) and cash in lieu of pension of £144,000 ($231,120). The housing payment was approved earlier today by the Bank of England’s non-executive directors and was announced in a statement.
The Guardian noted that Carney’s lucrative housing package “is likely to shock MPs and low income campaign groups concerned at wage inflation for top executives when wage rises are limited to 1% across the public sector.”
Outgoing Bank of England Governor Sir Mervyn King receives an annual salary of £305,000 ($489,525), considerably less than what Carney will earn. But the apparent salary gap isn’t nearly as severe when you account for King’s pension, which is an additional £300,000 per year. Further, Carney will have greater responsibilities than his predecessor as the Bank of England is set to overtake most of the U.K.’s banking regulation next year.
Robert Preston, business editor of the BBC, said the U.K. Treasury offered its lucrative housing subsidy because “it did not see why [Carney’s] lifestyle should suffer from a move to London.” It’s worth noting that Carney’s housing allowance will be subject to the top tax rate of 45%.
While some people may gripe about Carney’s compensation, another perspective is given by John Purcell, CEO of Purcell & Co., a London executive-search firm.
“He’s universally acknowledged as one of the world’s preeminent central bankers and could have got multiples of that in the private sector,” Purcell told Bloomberg. “If you compare it to the size of the job he’s been asked to do, it’s fairly small beer so long as he gets it right.”
Carney’s new position will give him a big pay raise. The Wall Street Journal notes that Carney’s current salary at the Bank of Canada is between $431,800 and $507,900—roughly half the amount he’ll receive from the Bank of England, before the housing allowance is accounted for. Carney does, however, collect a pension from his current position.