THE UK has expanded its restrictions on bankers pay and bonuses.
The Financial Services Authority (FSA) have expended the number of companies who are subject to restrictions from 27 larger banks to over 2,500 financial institutions.
The move will take place from January 1, 2011 and will mean the UK is the first company to comply with the EU’s legislation on bank bonuses. It will see 40-60% of bonuses over £500,000 deferred for three years. The new code also states that at least 50 per cent of the total package must be paid in shares or share-linked instruments according to the Financial Times.
Regulators worldwide have been scrutinizing executive pay after it was blamed for the excessive risk-taking that led to the recent banking crisis.
European Union governments agreed on June 30 that directors of banks who received public money will be forced to justify their bonuses and lenders will have to report the number of people earning more than €1m to regulators according to Bloomberg.
Efforts in the US to curb excessive pay in Banking haven’t gone quite as far as moves in the EU.
Meanwhile, Metro Bank launched in the UK yesterday, the first new bank to launch in the UK in more than 100 years.
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