Bankers in EU face limit on bonuses
Source: Agencies |
March 1, 2013, Friday
|
Print Edition
Print Edition
BANKERS in Europe face a cap on bonuses as early as next year, following agreement in Brussels yesterday to introduce what would be the world's strictest pay curbs, in a move politicians hope will address public anger at financial-sector greed.
The provisional agreement, announced by diplomats and officials after late-night talks between European Union country representatives and the bloc's parliament, means bankers face an automatic bonus cap set at a par with their salaries.
That can be raised to twice their pay packet only if a majority of the bank's shareholders vote in favor.
The rules will apply to all banks - American, Asian, Russian or European - based in Europe, and to units of European banks located abroad, so a Deutsche Bank employee working in New York or Tokyo would be subject to the same limits.
Equally, a Goldman Sachs banker in London, Frankfurt or anywhere else in the EU would be covered.
"There will be no exceptions," said Othmar Karas, the Austrian lawmaker who helped negotiate the deal. "It goes for all banks inside and outside the European Union and for all foreign banks inside the European Union."
The cap has been somewhat softened by provisions for adjusting the value of long-term non-cash payments to bankers, so that more bonuses can be paid out over time without breaking through the new ceiling.
The limit on bankers' pay is set to enter EU law as part of a wider overhaul of capital rules aimed at making banks more stable.
The provisional agreement, announced by diplomats and officials after late-night talks between European Union country representatives and the bloc's parliament, means bankers face an automatic bonus cap set at a par with their salaries.
That can be raised to twice their pay packet only if a majority of the bank's shareholders vote in favor.
The rules will apply to all banks - American, Asian, Russian or European - based in Europe, and to units of European banks located abroad, so a Deutsche Bank employee working in New York or Tokyo would be subject to the same limits.
Equally, a Goldman Sachs banker in London, Frankfurt or anywhere else in the EU would be covered.
"There will be no exceptions," said Othmar Karas, the Austrian lawmaker who helped negotiate the deal. "It goes for all banks inside and outside the European Union and for all foreign banks inside the European Union."
The cap has been somewhat softened by provisions for adjusting the value of long-term non-cash payments to bankers, so that more bonuses can be paid out over time without breaking through the new ceiling.
The limit on bankers' pay is set to enter EU law as part of a wider overhaul of capital rules aimed at making banks more stable.
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