View more on these topics

UK banks sign up to G20 bonus pledge

Five of the UK’s largest banks have agreed to sign up to a pledge to change their remuneration practices.

Barclays, HSBC, Lloyds Banking Group, RBS, and Standard Chartered have confirmed their commitment to comply with the FSA rule on remuneration, which comes into force on January 1 2010.

The new rules, in line with the G20 agreement, aim to set global standards for the implementation of remuneration principles set out by the Financial Stability Board.

They include the creation of independent remuneration boards within every financial institution as well as a caveat that ensures that any bounses do not impinge on an institution’s capital base over the long-term.

Any extra remuneration given by the banks will be based on long-term rewards, such as share options, rather than up-front cash bonuses.

The pledge means that bank employees may be subject to ”considerable” clawbacks of past bonuses if their performance deteriorates. The firms will also have to publish annual remuneration reports to help shareholders hold boards accountable.

By signing up to the pledge, the banks’ bonus system will come under FSA scrutiny – if any break the pledge they may face sanctions.

In a joint statement, the five banks say: “In a competitive and international business it is right to make sure that our staff are appropriately and competitively rewarded for sustainable, long-term performance.

“We will work with the FSA in adopting these remuneration reforms, recognising that all G20 nations have also committed to their implementation to ensure a level playing field.”

Chancellor Alistair Darling says: “It is vital that our financial services industry remains at the forefront of the industry globally and takes a responsible and long-term approach to remuneration.

“I am therefore pleased that the main banks incorporated in the UK have agreed to lead the way in implementing the agreement reached on bank remuneration at the G20, and expect them to set the standard for all other UK and international financial institutions to follow.”

Recommended

Jory wants 30% relief for all

B&CE deputy chief executive John Jory has called on the Government to bring in 30 per cent flat rate-tax relief on pensions and raise state pension age to 80.

Health - thumbnail

Healthcare predictions for 2015 from Jelf Employee Benefits

The continuing fall-out from the Competition and Markets Authority’s (CMA’s) review, the rise of the private GP and digital engagement will be the primary focuses in the private healthcare industry during 2015, according to Iain Laws, managing director, healthcare and group risk, at Jelf Employee Benefits.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com