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Banker remuneration – When will bonuses become more reasonable? In a context of belt tightening, will Europe’s financial centre lead the way to moderation?

UK: Cable announces review of bankers' pay

Vince Cable announced that the Coalition government is planning an investigation into the way the City operates, including executive pay and bankers’ bonuses.

The review is set to be conducted against the news that FTSE 100 boardroom pay has increased by 55% and banks have begun buying out the bonuses of rivals’ staff to lure them to join, in a sign that banks are becoming increasingly confident about their short-term prospects.

In a speech to the Confederation of British Industry (CBI), Cable said the review will also examine:

  • The factors influencing board decisions
  • The reasons for the growth of directors' pay
  • The impact of the investment chain and why returns from equity have reduced
  • Why takeovers that do not make economic sense still take place.

The Guardian reports the story here:
www.guardian.co.uk/business/2010/oct/25/executive-pay-vince-cable-corporate-britain

The Committee of European Banking Supervisors (CEBS) held a discussion on Friday regarding its consultation paper proposals to set a maximum ratio for bonuses against basic salary. The proposal leaves to banks the decision on the size of the ratio they set. The CEBS will publish final guidelines on the proposals on or around December 10th and 11th. The CEBS consultation paper is available here:

www.c-ebs.org/Publications/Consultation-Papers/All-consultations/CP41-CP50/CP42.aspx


ID: 46238
Publication date: 08/11/10
   
 

Created: 09/11/10. Last changed: 09/11/10.
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