EU Votes to End to Excessive Bankers’ Bonuses

The European Council and Parliament have agreed measures intended to end incentives which encourage excessive risk taking by banks, which they believe played a significant role in the global financial crisis.

Some of the key measures are

• upfront cash bonuses to be capped at 30% of the total bonus and at 20% for particularly large bonuses
• between 40% and 60% of any bonus must be deferred for 3 years and recoverable if investments to do not perform as expected
• special measures will be introduced for bailed out banks, such as RBS – repayment of taxpayers being the priority
• limits will have to be established by all banks to help bring down the “overall disproportionate role played by bonuses in the financial sector”

The new rules will take effect in January 2011

for the full report go to http://www.europarl.europa.eu/news/public/story_page/042-78554-190-07-28-907-20100709STO78534-2010-09-07-2010/default_en.htm