How does Mboweni's salary compare?

What the SA Reserve Bank governor earns relative to other central bank heads

The Annual Report of the Reserve Bank 2007/2008 was published last week. It revealed - as reported elsewhere - that the total remuneration of the bank's Governor Tito Mboweni had been increased by R820,000: from R2,976,000 in 2007 to R3,796,000 in 2008. Of the total amount Mboweni received, R3,387,000 was made up of his salary and fringe benefits, and R420,000 of contributions to his pension and medical aid.

Thandi Orleyn, a non-executive director who chaired the banks remuneration committee, defended the increase. She told one newspaper that an independent panel had looked at "the remuneration of other central banks and commercial banks in order to ensure his pay is ‘matched to the market'." (Orleyn's own remuneration from the Bank jumped from R117,000 in 2007 to R275,000 in 2008)

So how does Mboweni's salary compare to those received by other central bankers? There is not all that much data easily accessible online but below is a table derived from the sources that are available.

Remuneration of 10 of the world's central bankers*


Joseph Yam,

Hong Kong Monetary Authority

ZAR 6,664,952.25


Malcolm D Knight

Bank for International Settlements

ZAR 5,175,637.88


Mervyn King

Bank of England

ZAR 4,191,216.26


Jean-Claude Trichet

European Central Bank

ZAR 4,062,616.87


Tito Mboweni

Reserve Bank

ZAR 3,800,000.00


Axel Weber

Bundesbank, Germany

ZAR 3,299,291.37


Mark Carney

Canadian Central Bank

ZAR 2,955,476.16


Svein Gjedrem

Norges Bank

ZAR 2,093,459.34


Stefan Ingves

Riksbank (Sweden)

ZAR 1,872,369.94


Ben Bernanke

US Federal Reserve

ZAR 1,458,025.47







If one compares Mboweni's new salary to that received by other central bankers he doesn't do too badly. He earns marginally less than Mervyn King the Governor of the Bank of England; who, incidentally, recently turned down a substantial salary increase because, The Telegraph reported, "he did not feel it was appropriate in the current economic climate." He earns substantially more than Mark Carney, the head of the Canadian Central Bank and more than twice as much as Ben Bernanke, the Governor of the US Federal Reserve.

The next question is whether Mboweni should, by right, receive the same (or greater) remuneration than central bankers in the advanced industrialised economies?

When Mboweni was appointed governor designate of the Reserve Bank in 1998 he had no banking experience whatsoever. His academic qualifications were a BA (Hons) from the University of Lesotho and a one year master's degree in Development Economics from the University of East Anglia, in the United Kingdom.

He owes his appointment (or deployment) to that position because of his seniority in the ANC and his closeness to Thabo Mbeki.

In a recent interview with Fiona Forde of the Independent Group Mboweni explained exactly how he got his job:

"The then minister of labour was seated around the cabinet table with colleagues when a note was placed in front of him from Mbeki, who was then deputy president to Nelson Mandela. ‘I'm going to leave the room in a little while. When I do so, please follow me because I want to talk to you,' the note read.... Mbeki shook off his security guards to give them space. Then he broke the news. ‘We have decided that you should become governor of the central bank,' Mbeki told him."

Mboweni did not have to go through an open, competitive, or merit-based selection process in order to be appointed to the Reserve Bank position. He was not even interviewed for it. As noted last week, he even lacked the minimum requirements set out in the Reserve Bank Act.

In other words, his appointment was one of pure political nepotism. This is defined as the "showing of favoritism toward relatives and friends, based upon that relationship, rather than on an objective evaluation of ability, meritocracy or suitability. For instance, offering employment to a relative, despite the fact that there are others who are better qualified and willing to perform the job."

By contrast in rationally governed countries individuals are appointed to head up central banks because they are highly qualified academically and have extensive and relevant experience. Most central bankers have PhD's in economics, have often published extensively on macro-economics, and have almost always worked for years in banking and finance. For instance, according to the Wall Street Journal, Carney:

"...was a deputy governor at the Canadian central bank, responsible for international issues, from August 2003 to November 2004 when he left to become the third ranking official in the Canadian finance ministry and deputy for G7 matters. Before joining the government, Carney spent 13 years at Goldman Sachs, working for the investment bank in Canada, U.S., Asia and Europe. A native of Fort Smith, Northwest Territories, Mr. Carney earned a bachelor's degree in economics from Harvard University and a doctorate in economics in 1995 from Oxford University."

The C.V. of Malcolm Knight, the CEO of the Bank is similar. According to the Bank's website:

"From 1999 to 2003 Mr Knight was Senior Deputy Governor of the Bank of Canada. He was the Bank's chief operating officer and a member of the Board of Directors. From 1975 to 1999 Mr Knight was with the International Monetary Fund, where he held senior positions in both research and operations. While at the IMF, Mr Knight was also an adjunct professor at the Johns Hopkins University School of Advanced International Studies and the Virginia Polytechnic Institute and State University. From 1971 to 1975 he taught at the University of Toronto and the London School of Economics and Political Science. Mr Knight holds an Honour BA in political science and economics from the University of Toronto, and MSc (Econ) and PhD degrees from the London School of Economics and Political Science. He has published widely in the fields of macroeconomics, international finance and banking."

The C.V.'s of most central bankers across the America's, Asia, and Australasia are similar. It is these stellar academic qualifications, rare skills, and excellent track records, which are what really justify their pay (not simply their occupancy of the position).

*Note: These are rough and ready figures. They are derived from the latest figures available online translated into ZAR values at the relevant August 2008 exchange rate. Some of these figures may not include extras like pension contributions. This, however, would not fundamentally change the rankings. (See here, here, and here)

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