European Parliament and Council negotiators have reached a deal to cap bankers’ annual bonuses at the level of their annual salaries in most cases. Bonuses of up to twice annual salary would have to be authorised by holders of a half of a bank’s shares. Such authorisation would require the votes of at least 65 per cent of shareholders owning half the shares represented, or of 75 per cent of votes if there is no quorum. If a bank issues a bonus beyond the level of a banker’s annual salary then a quarter of the whole bonus must be deferred for at least five years.
The political agreement must be now be approved by Member States and the European Parliament (which is expected to vote on the issue at the 15-18 April plenary session). If approved, Member States would need to include the rules in their national laws by 1 January 2014.
Can’t possibly see how EU/Government regulation of private sector pay can possibly be a good idea for business, but hey ho what do I know!