Lord Turner, the chairman of the Financial Services Authority (FSA), has admitted the £350,000 remuneration package offered to Money Advice Service (MAS) chief executive Tony Hobman was "a bit too high".
The issue was among the key areas of focus of MPs on the Treasury Select Committee sub-committee yesterday, as they continued to take evidence as part of an inquiry into the service.
Asked by Conservative MP Michael Fallon whether it was right to award Hobman with a salary double that of the Prime Minister, Lord Turner explained how the figure was reached, taking account his previous remuneration.
"It was also set by cross reference to the then salary and remuneration as head of the FSCS, which was seen as the nearest comparable body," he said.
"I do support what MAS has subsequently done, where the board has somewhat moderated that. In retrospect, [the FSA's] decision pitched it a bit too high."
Asked again later on in the session if he had ever raised concerns about Hobman's salary, Turner said he had only made his latest verdict in recent days, in the run up to yesterday's evidence session.
"I am not saying that at the time I said it was a bit too high, I didn't do that," he explained.
"You are asking me now, as I look at it in retrospect, and I think it was pitched somewhat high relative to what it would and should be, and the MAS board have done a good job in recalibrating it somewhat."
Although he was not prepared to directly condemn the remuneration received by Hobman, MAS chairman Gerard Lemos accepted the problems and suggested the next chief executive is unlikely to be offered more than £200,000.
It was also explained how Hobman had already taken a £25,000 pay cut, while he had waived his bonus in 2011/12.
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