Federal Reserve Board Chairman Alan Greenspan may be the most powerful financial policymaker on the planet, but at least 244 of his fellow U.S. regulators get paid more.
As a matter of fact, his annual salary of $166,700, set by federal law, does not even put him among the 75 highest-paid employees of his own agency.
These and other salary numbers obtained by American Banker raise questions about whether the pay scale for financial regulators is out of whack.
Seven federal agencies that regulate financial services supplied extensive salary breakdowns in response to Freedom of Information Act requests for the names, titles, and salaries of employees who make $100,000 or more. The 12 Federal Reserve banks, which say they are not covered by the act, voluntarily provided less detailed information.
The Securities and Exchange Commission says it is still compiling the data requested.
Among the surprising findings was that two of the smallest financial services regulatory agencies -- the National Credit Union Administration and the Federal Housing Finance Board -- pay some of the highest salaries.
Seven of the 20 highest-paid regulators work for these two agencies; the rest are either Fed employees or the presidents of some of the 12 Federal Reserve banks. The NCUA alone pays 11 people more than any employees of the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency, or the Office of Thrift Supervision receive -- those three agencies have a voluntary salary cap equal to the salary of the Vice President of the United States, currently $192,600.
A prominent former regulator said that the comparatively high pay at the credit union agency was not commensurate with its responsibility.
As evidence of that, L. William Seidman, a former FDIC chairman who now works as a commentator on CNBC, noted that the 9,814 credit unions overseen by the NCUA have a combined $538 billion of assets -- $40 billion less than those held by Citigroup Inc. alone.
The agency is "responsible for assets that are a minute part of what the other regulators are responsible for," he said. "People should get paid in connection with their responsibility. In government, that is not always true. In government, much more depends on how much political independence you have. We know that the credit unions have the most powerful political organization" on Capitol Hill.
Officials at the credit union agency countered that their pay was not excessive.
Executive Director James L. Skiles -- who receives $252,000 a year, more than the presidents of eight Federal Reserve banks -- said that a few years ago his agency had been suffering from a high turnover rate and could not attract qualified candidates for some of its senior positions.
Because of the salary cap that the agency had at the time, some employees were unwilling to seek higher positions, which would have given them more responsibility but not much more money, Mr. Skiles said in an interview Tuesday.
In the three years after the higher pay scale was implemented, the turnover rate was cut in half, to 6%, he said.
"We have built a good pay system at NCUA," Mr. Skiles said. "It has lessened the problem of pay compression. It has allowed people to compete internally for those positions they would like."
When asked if the higher pay was justified given the relative lack of complexity of most credit unions when compared with banks, he replied that, like the FDIC, the NCUA fulfills two functions: insuring and regulating federal credit unions.
"We don't have the asset size of banks, obviously, but we play a fairly significant role over all in helping to improve the financial stability of the United States," he said. …