UK watchdog exec gets $1 mln after N.Rock fiasco

LONDON, June 30 (Reuters) - Britain's financial watchdog paid over 500,000 pounds ($1 million) in compensation to a senior executive when he lost his job and become the regulator's highest-profile casualty of the Northern Rock crisis earlier this year.

Clive Briault was head of retail banking at the Financial Services Authority with responsibility for Northern Rock. He earned 883,711 pounds for the year to the end of March including 528,952 pounds compensation for loss of office, according to the FSA's annual report released on Monday. That was more than double his earnings the previous year.

The regulator announced in March that Briault would leave as part of a management shake-up following the debacle at lender Northern Rock.

Briault had also been named as a potential candidate for the chief executive's job last year.

The FSA came under fire for its role in the near-collapse of Northern Rock, accused by politicians of failing in its duty and exacerbating the difficulties that followed. The lender was nationalised earlier this year.

Hector Sants, who took over as FSA chief executive last July, was paid 661,948 pounds for 2007/08, which included a 114,000 pound bonus and was up 37 percent from 2006/07.

"I am determined that the FSA will not be defined by the Northern Rock incident, but rather our response to it," Sants said in the report.

Since August, when Northern Rock's funding crisis escalated, the regulator has "performed extremely well" in regard to its supervision and the way it had intensified its engagement with banks, Sants said.

Callum McCarthy, FSA chairman, also said there was support from practitioners not to overhaul the regulatory model. "Separation of supervision of banks, securities firms and insurance companies in any form would be a retrograde step which would cost the UK dearly," he said. (Reporting by Steve Slater; Editing by Erica Billingham)