GFS LinkedIn
GFS Facebook
GFS Twitter
GFS RSS feed

UK banks to disclose executive payments

Wednesday 7 December 2011 – by [email protected]

Executives at Britain’s largest banks will have to disclose how much they stand to earn under proposals aiming to curb “unacceptable” bonuses in the financial sector.

The UK government’s draft proposals will see new rules demanding that the rewards given to a bank’s eight most senior non-board executives must be disclosed from 2012.

The measures will apply to banks operating in the country that hold over £50bn (€58.3bn/$78.1bn) in UK assets. Currently 15 firms would be forced to make the disclosures, the government said.

Announcing the proposals, Mark Hoban, financial secretary to the Treasury, declared: “The banking system cannot reward employees for short-term performance while leaving investors exposed to long-term risk.

“We want shareholders to hold banks to account for their bonus structure, which is why we’re taking action to make top-level pay more transparent. We want the most transparency for those with the greatest responsibility.”

But the proposals would not name the bankers or give their job titles, though they would be required to disclosure the amount they earn in fixed, variable and deferred income, along with information on pension accruals and severance benefits.

The measure was agreed as part of the ‘Project Merlin’ deal on bank lending to small businesses in February, which also included the voluntary disclosure of the salaries of banks’ five most highly paid executives below board level.

The proposals come a day after the Association of British Insurers called for a “fundamental shift” in corporate remuneration policy.

“It can no longer be business as usual for this remuneration round,” the insurance body said in the letter to all UK-listed banks.

A change is necessary with banks across the board cutting their numbers of employees and with additional capital needed to meet new regulatory initiatives, it argued.

The consultation for the government’s proposals ends on 14 February 2012.

Send us your thoughts (in strict confidence) or submit an article in response:
Email: [email protected]

Post as Anonymous
  Display name
Please, enter security code

No comments yet.