In a vote on 16 April 2013, the European Parliament voted to cap bankers’ bonuses in order to “curb speculative risk-taking”.
Under the plans, bonuses will be capped at the same amount as basic salary. However, this could be raised to a maximum of twice annual salary if approved by at least 66% of shareholders owning half the shares represented, or of 75% of votes if there is no quorum.
Additionally, to encourage bankers to take a long-term view, a minimum of 25 per cent of any bonus exceeding 100 per cent of salary must be deferred for at least five years.
The new rules will apply from 1 January 2014 if formally approved by the Council of Ministers. The rules are part of a wider package to increase the financial stability of EU banks and strengthen the supervisory framework.
Further details of the reform package can be found here:
http://www.europarl.europa.eu/news/en/pressroom/content/20130416IPR07333/html/Parliament-votes-reform-package-to-strengthen-EU-banks
To discuss any bonus issue or other employment problem, contact us today:
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