bonus caps

HSBC has given 15 of its top bankers “fixed pay allowance arrangements” worth £7.1m under a controversial new pay scheme designed to dodge tough new European Union rules on bankers’ bonuses…The awards are part of big banks’ plans to increase the basic pay of executives to sidestep tough new EU rules designed to clamp down on excessive bonuses. Banks have turned to awarding fixed pay allowances after the EU ruled to cap bonuses to 200% of salary, even if shareholders wanted to approve higher payments. The new payments are counted as fixed pay, which means banks can, with shareholder approval, pay bonuses of 200% of bankers’ collective basic pay and fixed pay allowances. The fresh money, which is not subject to clawbacks designed to retrospectively recoup bonuses in the event of any wrongdoing emerging in the future, covers the first half of the year – and bankers can look forward to further payments every three months. A fifth of the shares will vest in March 2015, with the rest locked up until 2020. [Guardian]

If you or your firm aren’t already covered by one of Europe’s many bonus limitations, maybe now you are! Read more »

  • 24 Feb 2014 at 4:23 PM

Bonus Watch ’14: HSBC Has A Plan

They’ll be upping everyone’s “allowance” to compensate the EU’s so-called “bonus caps.” Read more »

“I admire the move by the European Union to restrict the bonuses of that class of privileged civil servants called “bankers” — a recognition that the taxpayers have the right to control the income of those they subsidize and bail out, just as they set the salaries of other state-sponsored workers. Alas, bankers in their current status are an offense to capitalism; they are in a strange situation of having upside without downside, no skin in the game. As an additional insult to the taxpayer, bankers paid themselves the largest bonus pool of their history in 2010 — thanks to Troubled Asset Relief Program. If a banker wants to be free in his income, he should start his own hedge fund. Because hedge fund operators are invested in their funds; they typically have 50 times more risk as a share of their net worth than their largest customer.” [NYT]

  • 26 Sep 2013 at 1:39 PM

Bonus Watch ’14: Britain Goes To The Barricades

The U.K. is on a bit of a winning streak in its legal battle to stop the European Union (read: France) from destroying London’s financial services industry, and it’s pressing its luck in a last-ditch bid to keep the vultures in Brussels and Paris from kind of but not really taking a chunk out of your paycheck. For in spite of what the other 27 members of the bloc think, it seems that the bonus curbs will both be ineffective and probably maybe sort of illegal under that grand monument to jargon and opacity, the EU Treaty. Read more »

  • 29 Jul 2013 at 3:39 PM
  • Banks

Bonus Watch ’14 And Beyond: Europe

The EU is amending its hilariously easy-to-skirt bonus restrictions, to punish you, should your firm allow its Tier 1 capital ratios fall below an arbitrary (and possibly variable) level. Read more »

The other half are prepared to inform people them’s the breaks. Read more »