Email | Print    Type Size  -  +

Who needs a big raise? SEC staffers

Regulators should earn more than bankers -- at least that's what several regulators from Europe and Asia have been saying at Davos.

By Peter Gumbel, Europe editor
January 30, 2009: 4:37 PM ET

(Fortune) -- Here's a simple idea to prevent Wall Street meltdowns from happening again in the future, brought to you courtesy of the World Economic Forum in Davos: Start paying regulators much, much better.

Several financial market regulators from Europe and Asia say they think one of the reasons that Wall Street shenanigans including the Madoff alleged fraud were allowed to continue unchecked for so long is because staffers at the Securities and Exchange Commission and other U.S. market watchdogs earn so much less than the bankers, fund managers and other people they are supposed to be policing.

"You need good career people to do this job, and if you want good people who make a career of it, you need to pay them properly," says Howard Davies, the former head of Britain's Financial Services Authority who now heads the London School of Economics. "In the U.S., they don't -- and they have got it wrong." he told Fortune.

The same message comes from Tony Tan Keng-Yam, a former top Singapore government offical who currently heads the Government of Singapore Investment Corporation. Singapore created a special civil service pay scale for its market regulators. Top people there can earn the equivalent of over $1 million annually. The same is true in Hong Kong. In London, meanwhile, heads of departments at the FSA earn more than the equivalent of $250,000 annually. "The people who work in the regulatory agencies need to be as good as the people in the market itself," Tan Keng-Yam said.

The SEC was long at a particular disadvantage because it paid its staffers less than those at other federal regulatory agencies. That was changed in 2002, but SEC staffers who earn more than $100,000 remain the exception.

That's a fraction of what many bankers on Wall Street earn. There is, of course, one big advantage to being a regulator, especially at troubled times like these: relative job security. Davies says the FSA in London is currently flooded with resumes. To top of page


Company Price Change % Change
Apple Inc 99.76 2.09 2.14%
Bank of America Corp... 16.26 0.05 0.31%
Pfizer Inc 27.93 0.10 0.36%
Facebook Inc 76.95 1.00 1.32%
Microsoft Corp 44.08 0.45 1.03%
Data as of Oct 20
Index Last Change % Change
Dow 16,399.67 19.26 0.12%
Nasdaq 4,316.07 57.64 1.35%
S&P 500 1,904.01 17.25 0.91%
Treasuries 2.18 -0.02 -0.82%
Data as of 8:11am ET
More Galleries
Some Converse copycats cost big bucks A few bargain brands got swept up in Chuck Taylor's net, but others cost a pretty penny. More
Urban infrastructure gets a second life Railroad beds become parks, power plants become aquariums and slaughterhouses are now art centers as an industrial past turns people-centric. More
Boomtown moms From working mothers raising their kids in RVs to stay-at-home moms who spend their days organizing events for the Oil Wives club, meet the moms of North Dakota's oil boom. More
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.