Clawback Watch ’22: Britain’s Banks

If you’re a banker working across the pond, get your underhanded schemes out of the way now, because come 2015, they’re going to start counting against you (and will continue counting against you vis-a-vis bonuses through 2022).

The new bonus rules will allow banks with headquarters or subsidiaries in England to reclaim, for up to seven years, any bonuses paid to bankers who engage in wrongdoing. The rules would allow banks to take back bonuses that have not vested, and in a new twist, also those that have. “This is a big deal and it is very different” from previous rules, said Tom Gosling, a partner at PricewaterhouseCoopers in London. “Employees at British banks are faced with the prospect that they could have seven years of bonuses clawed back if they get caught up in some wrongdoing.” The rules go into effect in January 2015 and are not retroactive, thus excluding some of the latest cases of wrongdoing that have come to light. The provisions seek to put muscle behind efforts by policy makers to discourage short-term risk taking, which were seen to be partly to blame for the financial crisis. Officials hope the bonus rules will discourage bankers from engaging in egregious conduct in the first place. They also raise interesting questions such as how a bank might take back a bonus that was spent, say, on an Aston Martin.

Bank of England Sets Tough Rules for Banker Bonuses [Dealbook]

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One Response to “Clawback Watch ’22: Britain’s Banks”

  1. Guest says:

    But Daddy, I have already bought a Bentley, this is quite unfair.