The European Banking Authority has released a detailed consultation on the matter and declared that misconduct and mis-selling by staff in financial institutions have been driven by poor renumeration polices and practices.It acknowledged that staff pay is an ?important means? for financial institutions to attract and hold on to the best employees, but believes further regulation is necessary. Going forward, the bonus cap will limit variable pay to the same size as a banker?s salary. However, this figure can be double a salary if shareholders agree. A statement from the European Banking Authority read: ?The guidelines ensure that institutions calculate correctly and consistently the so called ?bonus cap’ by setting out specific criteria for mapping all remuneration components into either fixed or variable pay and detailing how specific remuneration elements such as allowances, sign-on bonuses, retention bonuses and severance pay are to be recognised over time.” Prior to this ruling, the British authorities had decided against a bonus cap ? siding with the declaration from financial institutions that it drives up salaries and undermines financial stability. Read more about bonuses:
- Bonuses are almost back to pre-recession levels
- Shareholders call for bonuses of Barclays bankers involved in elephant deal to be clawed back
- Is the gender pay gap down to discrepancies in bonuses?
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