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GUEST COMMENT: You would be foolish not to keep an eye on what the EU’s saying about bonuses

Michel Barnier, listening intently

Michel Barnier, listening intently

Most people have now received their bonuses for 2011. If you are among them, compensation may not be at the forefront of your mind and you may be getting on with your role rather than monitoring events in the European Parliament.

This would be an oversight. Yesterday, some European lawmakers in the Parliament called for bankers’ bonuses to be capped at twice their basic pay.

As this Reuters article points out, this is the continuation of a process set in motion by EU financial services chief Michel Barnier, who has called for a specified ratio between banking salaries and bonuses.

Othmar Karas, an Austrian politician, is steering the measure through the European Parliament. And some, such as the Belgian Green Party member Philippe Lamberts, are calling for bonuses to be no higher than salaries.

Such calls may not represent mainstream opinion, but they are a reminder that the pay debate hasn’t gone away and that the trend fromEuropeis for more punitive restrictions on banking pay – not less.

In the event that the European Union legislates to specify the mix between fixed and variable compensation, we could find ourselves in a very different world. Right now, banks have to set their own internal ratios on variable vs. fixed compensation but there are no hard limits on an individual basis. If limits are imposed, it seems likely that fixed compensation – salaries – will rise again.

Comments (2)

Comments
  1. “Such calls may not represent mainstream opinion, but they are a reminder that the pay debate hasn’t gone away and that the trend fromEuropeis for more punitive restrictions on banking pay – not less.”

    I think you would find that MAINSTREAM opinion would like you guys to be paid by means of corporal punishment and incarceration. You screwed us all, got bailed out at our expense and go on ripping us off while paying yourselves about three to six times what you are worth. Not nice.

    Mainstram BANKING opinion is probably exactly as selfish and self-centred as you describe.

  2. We are going through a period of who’s to blame for our economic woes and politicians have decided that bankers are fair game. It is pretty easy to get people worked up about salaries they could never expect to earn away from the City. The fact is that all the overspending by Government was not a fall out from anything that banking was doing – the overspend by about 20-25% every year was not forced on Government by bankers. ThE £1.4 trillion debt Government is looking at was not caused by bankers. And the huge personal debts individuals took on was not forced on them by bankers. It isn’t the first time political leaders have blamed the innocent for the bad choices politicians make.

    The EU’s agenda on the subject of bonuses is tainted by the envy it has of rthe position of the City – and wouldn’t they like a big piece of that? Eroding the talent’s ability to get paid well is a great way to destablise the focus of organisations. Bankerrs just should not let themselves get dragged into any discussion about pay, who was to blame for politicians poor decisions, or the population’s inability and will power to control its financial affairs.

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