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March 4, 2014

Final Rules, and a Warning, on Banker Bonuses in Europe

“LONDON – The European Commission adopted rules on Tuesday that finalize the details for limits on banker bonuses, and a top official cautioned against efforts that have cropped up to circumvent the new restrictions.

“Michel Barnier, the commissioner responsible for overseeing financial services, warned banks against pushing too far with new payments, called “allowances,” that they have devised to skirt the limits and increase fixed pay. The 2013 European law limits the bonuses of certain bankers to 100 percent of an employee’s fixed salary, or two times salary if shareholders approve it.

“Some banks are doing their utmost to circumvent remuneration rules,” Mr. Barnier said. He said that the new rules would be enforced by the European Banking Authority and local regulators. “The commission will remain vigilant to ensure that new rules are applied in full.”

“The European Commission adopted the so-called Regulatory Technical Standards, a 61-page document that identifies the employees to whom the rules will apply, including anyone earning more than 500,000 euros, heads of divisions including human resources, and those who trade certain amounts of capital.”

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Read full NY Times article here

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