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FCA mulls salary clawback for rogue bankers

The FCA is considering introducing new rules that would mean bankers are forced to hand back their basic pay as well as bonuses where they have been found guilty of wrongdoing.

Giving evidence to the Treasury select committee yesterday, FCA chief executive Martin Wheatley said: “We have lost the tool we had, which was clawback of a significant component of compensation, so being able to claw back fixed pay would be a substitute, to a degree”, the Financial Times reports.

Wheatley said the regulator was “sympathetic” to the idea, despite “all sorts of contractual issues”.

Last March the Bank of England signalled it would be introducing rules that meant firms had to embed clauses in staff contracts that would allow them to claw back bonuses in the event of wrongdoing or serious failure.

An EU-wide cap on bonuses comes into force this year and restricts payouts to 100 per cent of salary or 200 per cent with shareholder approval.

But the UK has fought against the cap, although Chancellor George Osborne dropped a legal challenge in November.

Wheatley said the FCA has anecdotal evidence that shows banks have simply raised base salaries to get around the cap.

At yesterday’s hearing Treasury commitee chair Andrew Tyrie said: “We are going to need to persist in trying to explain to our EU colleagues just how misguided what they have done is, and the long-term deleterious effects.”



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There are 8 comments at the moment, we would love to hear your opinion too.

  1. What a good idea. Now is there any other organisation we can apply this to, which has singularly failed to perform to the detriment of the public?

  2. E L Wisty (an only twin) 11th February 2015 at 10:03 am

    I trust that this initiative will be extended to a salary claw back in respect of “rogue” regulators too?

  3. Is this really how the FCA want to move forward ? more scare tactics !

    You only have to see the picture of MW in this article, angry, cold, even vindictive

    I suppose you only have to worry if you are doing wrong ! or do you ?

  4. Chasing smoke in a hall of mirrors.

    If the principle is correct then why shoudln’t it apply to employed advisers? And for that matter, all employees in all professions and industries?

  5. E L Wisty (an only twin) 11th February 2015 at 12:12 pm

    @ DH

    “Angry, cold, even vindictive”.

    I’m not sure if this is true – rather, I had assumed that Andrew Tyrie was doing something to him, out of shot.

  6. I think the only way of stopping rogue bankers is to send some to jail – yes white collar workers actually being punished for committing crimes – amazing but there it is.

    How is it HSBC the bank and its Chairman and board of directors and the criminal staff as well get no punishment for in effect stealing and helping steal millions of pounds of taxpayers money. If welfare claimants steal £50 they get taken to court but this corrupt generation of politicians allows white collar criminals to even get Lordships and then Government Ministerial Appointments. No wonder no one bothers to vote – they are indeed all the same – eating from the same trough

  7. I wasa thinking we could extend it to politicians….

  8. Tut tut Phil1Edinburgh, How can you compare those vile benefit scroungers to senior business people who- due to pressure of work may have simply forgotten where they had parked some loose change whilst on a well deserved break in Switzerland?

    A few years a go there was a play on BBC ( a left -wing TV channel) called Many Happy returns about just such a situation. I wonder if they are thinking of digging it out of the archives now?

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