Tens of thousands more bankers will be hit by the EU’s strict bonus cap under a proposal that severely tightens the political clampdown on financial sector pay.
Europe’s banking regulator has this week significantly widened the definition of staff who will be affected by the incoming bonus cap to include anyone earning more than €500,000 ( US$ 646.000)
The move by the European Banking Authority will stir up anger in the UK, which has lobbied heavily against the rules as bankers and politicians fear it will hurt the City of London’s competitiveness.
It comes amid a severe crackdown on executive pay across Europe, particularly in the financial services sector, with Switzerland recently voting to give shareholders the power to reject senior bosses’ pay packages.
The EU-wide bonus cap, which comes into effect next year, will restrict variable pay to the same level as salary, or at twice that level with explicit shareholder approval.
It will apply to all employees classed as material risk-takers at banks based in the EU and to any such people working for foreign banks in the 27-member union.
Read more: Bonus cap to catch tens of thousands more bankers in Europe - FT.com
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