Bankers in Europe face a cap on bonuses as early as next year, following agreement in Brussels yesterday to introduce what would be the world’s strictest pay curbs, in a move that politicians hope will address public anger at financial sector greed.
The provisional agreement, announced by diplomats and officials after late-night talks between EU country representatives and the bloc’s Parliament, means bankers face an automatic bonus cap set at a par with their salaries.
That can be raised to twice their pay packet only if a majority of the bank’s shareholders vote in favour.
The rules will apply to all banks – American, Asian, Russian and European – based in Europe, and to units of European banks located abroad, so a Deutsche Bank employee working in New York or Tokyo would be subject to the same limits.
Equally, a Goldman Sachs banker in London, Frankfurt or anywhere else in the EU would be covered.
“There will be no exceptions,” said Othmar Karas, the Austrian lawmaker who helped negotiate the deal. “It goes for all banks inside and outside the EU and for all foreign banks inside the EU.”
The cap has been somewhat softened by pro-visions for adjusting the value of long-term...
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