Bankers’ pay faces a crackdown as a result of proposals drawn up by the Committee of European Banking Supervisors (CEBS).
The measures include proposals to cap senior bankers’ pay and limit the size of bonuses. For the highest-earning individuals the cash elements of any payout will be capped at 20%. The rest of the reward will be either deferred or held in securities. It has also been proposed that organisations set a cap on variable remuneration as a multiple of base salary.
Jon Terry, reward partner at PricewaterhouseCoopers, said: “The CEBS guidance makes the European regulation of banking pay among the most stringent and it confirms the extension of the provisions to the world-wide operations on European banks. This will be a huge disappointment to the European banking industry, which had hoped for a more pragmatic interpretation of the [capital requirements directive].
“Of particular concern will be the requirements that will apply to European banks operating, for example, in Asia, compared with local firms.”
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