Britain To Keep Its Thoughts Re: Bonus Caps To Itself Moving Forward

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Britain put in a good faith effort to challenge what it sees as unfair/unrealistic bonus rules from the EU but it's since been told to sit down and STFU, so: you're on your own.

Britain on Thursday dropped its challenge to the European bonus cap after an adviser to the Court of Justice of the European Union rejected all of the country’s claims. George Osborne, the chancellor of the Exchequer, said in a letter to the governor of the Bank of England that the case faced “minimum prospects for success” and that the government would abandon its efforts. The Court of Justice opinion dealt a serious blow to British efforts to challenge the law, which limits bankers’ bonuses to the equivalent of their annual salaries, or to two times their base salaries if the company’s shareholders approve it. Even though the opinion was not final and had to be ruled on by the judges of Europe’s highest court, it forced Britain to scuttle its challenge. The bonus cap underscores the furor over banker pay in Europe, which is far greater and more apparent than in the United States. Both Britain and the United States have identified pay as a central factor to reckless risk-taking by bankers. But Europe, and, at the national level, Britain, have put in place far more rules on remuneration than the United States. Britain challenged the legal basis under which the bonus cap was passed, arguing that pay levels are part of social policy and thus under the authority of member states, not of the European Union.

Britain Drops Its Challenge to Cap on Banker Bonuses [Dealbook]

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Deferring 'Significant' Amounts Of Compensation, Placing Caps On Bonuses Not Working Out So Well For Barclays

Only in that senior people the bank worked hard to recruit are quitting en masse. Otherwise, it's great. Barclays spent a decade assembling a team of the most successful gas and power traders in Europe. It took less than 16 months to lose most of them. Mercuria Energy Trading SA, based in Geneva, hired five members from the group of about a dozen from March 2011 to June this year, including Phil Sutterby as head of U.K. and European gas and Roger Jones, the former global chief of commodities, according to people with knowledge of the moves. Another six left for companies including UBS, Noble Group Ltd. and Freepoint Commodities LLC. The departures from the U.K.’s second-biggest bank reflect bonus caps, limits on the amount of money traders can risk and shrinking revenue from the division that includes commodities. While hiring from hedge funds and rival lenders helped Barclays catch up with Goldman Sachs and Morgan Stanley in commodity derivatives, according to Greenwich Associates, a focus on deferred pay left the bank vulnerable to headhunters. “The significant amount of deferred compensation and the aggressive cap on cash payouts at Barclays has unsettled a number of individuals,” said Peter Henry, New York-based head of front-office research at Commodity Search Partners. “Add to that the fact they have been systematically targeted by privately held trading houses, specifically Mercuria, and it’s fairly understandable why senior traders are leaving.” Bonus Limits Spark Exodus At Barclays Trading Unit [Bloomberg]