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Morning Coffee: The worst job in banking with a £480k salary, and Barclays' strange promise

As Mark Carney’s term (and its extensions) comes to an end as Governor of the Bank of England, the UK’s Treasury have hired headhunters to find a replacement.  Sapphire Partners have been instructed to explore all options and ensure that the government has taken into account all diversity issues, although there is no word as to whether they have been promised a 20% premium on the fees for finding women and ethnic minorities for the shortlist.

The salary being offered, while high in absolute terms, isn’t really all that much for the kind of high-flyers that the BoE is looking for – it’s £480k ($620k) with possible potential for a housing allowance for an overseas candidate but very limited bonus potential.  And in return for this middle-ranking-MD kind of money, you’ve got a post in which practically everything in Britain seems to end up at your door.

As well as having to deal with the end of quantitative easing and managing the rickety “forward guidance” regime in monetary policy, the successful applicant will have full responsibility for the banking system’s post-Brexit nightmares, with limited ability to delegate them to the Prudential Regulatory Authority and Financial Conduct Authority (even more limited if the job is won by Andrew Bailey, current CEO of the FCA).  As if these problems weren’t enough, the Bank seems now to be the go-to organisation for general economic policy advice, having been commissioned to give opinions on issues from climate change to productivity growth to disaster scenarios in the event of no-deal Brexit.  Everything it does gets second-guessed by the financial media and then third-guessed by the Treasury Select Committee; when you consider that part of the pay is danger money for having to sit down and let Jacob Rees-Mogg patronise you for four hours every couple of months, £480k looks pretty measly.

There are some compensations, though; as much lukewarm tea and nasty coffee as you can drink, served by pink-waistcoated flunkies, for example, plus a prime seat to watch the Lord Mayor’s Show.  If you enjoy having a large staff of PhD economists hanging on your every word and calling you “Mr Governor” all the time (or, presumably, panicking about whether “Madame Governor” is the correct alternative), then there’s few other jobs that will scratch that itch.  But when you add up the pros and cons, it looks like an extraordinarily high-profile, high-stress job for the money offered.

Of course, cynics might suggest that spending eight years earning just under half a million as central bank governor is not so much a career move in itself as an investment in your future career.  Once the term is up, you’ll be eminently qualified to step out of the big brass doors at Threadneedle Street and in through the revolving doors of any hedge fund or investment bank on the Street and start making the real money.  But of course, any such venial aims as this will surely be weeded out in the selection purpose, and the eventual next Governor will be a pure soul taking on the job for the sheer goodness of public service.  Probably.

Elsewhere, a spokesman for Barclays has said that there are “no plans for job cuts” when asked some fairly obvious questions by Business Insider.  That’s likely to come as a surprise to senior staff in the investment bank, who are still formally committed to both the targets that Tim Throsby regarded as unachievable and the cost-cutting program that made them so.  Bonus accruals are down “double digits” on last year, and the rumours of an overall 20% cut to the total compensation of the investment bank have not gone away.

It’s notable that the Barclays spokesman, Simon Hailes, refused to elaborate on the “no plans for job cuts” statement, by giving a time frame or saying which parts of the bank he was referring to.  It might be that some plans are just about to be made.  Or it might be that Barclays feels it doesn’t need to make any plans; if the compensation rumours are anywhere close to being true, it might be able to meet all of its target headcount reductions by staff departures.  That’s not usually considered a particularly good way to carry out a downsizing, but it saves the redundancy payments.

Meanwhile …

Not good news for Goldman, as the Department of Justice staff have recommended that any settlement over the 1MDB affair ought to include a guilty plea to some criminal charges.  This wouldn’t be the first such deal for a big bank since the crisis, but it’s still a big negative (FT)

There were 117 people promoted to Managing Director at JP Morgan today, including a record 30 women.  Honours seemed to be reasonably evenly divided, with about a third of the new promotions working in IBD or corporate banking, and 20% in the trading businesses (Financial News)

Once upon a time she was Morgan Stanley’s legendary dot com analyst.  More recently, she’s been a partner at Kleiner Perkins.  Now Mary Meeker is launching her own VC fund, raising $1.25bn for (confirmation that good names are running out) Bond Capital (Bloomberg)

More casualties from the UBS “is it a bond or a loan” fiasco; now Francisco Pinto-Leite, global head of leveraged finance and James Boland’s boss at the time of the deal, will be leaving the firm by the end of the year (WSJ)

Being in the habit of ordering massive bottles of champagne isn’t obviously relevant to guilt or innocence in an insider dealing trial, but it’s more or less inevitable that it’s going to get brought up (Bloomberg)

Harvard Business School has advice on how working dads can make more time for their families, although since the key points seem to be things like “set boundaries” and “make time for little things”, it might not be wholly achievable for your average mid-career investment banker (Harvard Business Review)

Might be worth the effort though; research from the Netherlands shows that your spouse’s general level of happiness is often a better predictor of your longevity than your own (Studyfinds)

Absolutely tragic; our thoughts to out to Matt Linsey, founder of North of South Capital, who lost his son and daughter in the Sri Lanka bombings (City AM)

A presentation expert warns that most financial services people are bad presenters because they try to stick far too much information in and says “it’s not your job to be brilliant” (Finews)

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AUTHORDaniel Davies Insider Comment
  • An
    25 April 2019

    What was the split by gender of suitable applicants for promotion to MD at JP Morgan?

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