gasax, bit of a circular argument you just made!!
For the regulator to be the best, they have to invest in good people as you rightly pount out many have left for greener pastures. to bring in brighter and better people you have to go outside the organisation and bring in new blood from the private sector. To do this you have to make the grass as green or greener which means offering near to private sector packages.
Senior management in this country these days is in the multiples of hundreds of thousands of pounds climbing up to the multiples of millions of pounds. It is the way life is!!!