Mark Carney is discovering that the Bank of England governor's job comes with a lot more scrutiny than he is used to.
The head of Canada's central bank found himself caught in a public debate about his compensation after his new employer revealed that he will be earning close to $1.4-million when he takes up the Bank of England post in July. That is more than double his current compensation at the Bank of Canada.
Bank of England officials had already announced that Mr. Carney would receive a salary of £480,000, or $770,000, far more than the current governor Sir Mervyn King, who earns £305,000, plus an additional £160,000, or $256,000, a year in lieu of pension contributions.
But on Wednesday, the bank disclosed that Mr. Carney will also will receive £250,000, or $400,000, in an annual housing allowance. The extra amount brings his total compensation to £890,000, or around $1.4-million. The allowance "had been offered to him prior to his appointment," the Bank said in a statement. "This will be subject to tax at 45 per cent and such social security contributions as the Bank may be required to deduct."
But the amount struck some as excessive, especially as the British government cuts social housing benefits in the midst of an austerity drive.
"This huge remuneration package is one of the biggest in the public sector," said Matthew Sinclair, chief executive of the TaxPayers' Alliance. "Now that the full details of his pay and perks are out in the open, it is up to politicians to hold him to account and help taxpayers judge for themselves whether he is worth all this money.
"When the Government is rightly planning to cap [the] housing benefit, it will certainly stick in the throat of many that Mr. Carney is receiving more per year in housing allowance than the average price of a British home."
The Guardian newspaper added: "The revelation that he will gain a further £250,000 to house his wife and four children is likely to shock MPs and low income campaign groups concerned at wage inflation for top executives when wage rises are limited to 1 per cent across the public sector."
Mr. Carney is already facing questions over his decision to take the job for five years instead of seven as requested by the British government. Some Members of Parliament have questioned whether that is sufficient time to reorganize the Bank of England under its new mandate, which includes more responsibility for supervising British financial institutions. And he has raised eyebrows in Britain over a possible entry into politics in Canada. MPs will have a chance to grill Mr. Carney about all of these issues in February when he appears before a parliamentary committee that is reviewing his appointment.