New Bank governor secures £874,000 pay package

Mark Carney, the incoming Bank of England governor, is set to receive a £480,000 per year salary as part of a remuneration package worth close to £875,000, the Bank’s non-executive directors have announced.

Mr Carney’s salary dwarfs that commanded by the current incumbent, Sir Mervyn King, who receives a basic entitlement of £305,000. He is also to receive a cash allowance in lieu of pension of 30 per cent of his salary, equivalent to £144,000, when he takes up his appointment on 1 July 2013.

However, the Bank said this reflected the fact that the pension scheme into which Sir Mervyn was enrolled is closed. Enrolling Mr Carney in this scheme would have cost more than 100 per cent of his salary, the directors added.

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The Bank has also confirmed their agreement to an annual accommodation allowance of £250,000 for the next governor and his family, which had been offered to him prior to his appointment. This takes Mr Carney’s total package to £874,000.

On 26 November, chancellor George Osborne appointed Mr Carney, Bank of Canada governor, to succeed Sir Mervyn King as the governor of the Bank of England.

Under statute the non-executive directors of the Bank of England determine the remuneration of the governor and the deputy governors.

The Bank said the accommodation allowance will be subject to tax at 45 per cent and such social security contributions as the Bank may be required to deduct.