RULES regulating bonuses in the US are substantially less onerous than equivalent UK rules introduced in January, according to the British Bankers’ Association.
The framework for the US rules, released by the Securities and Exchange Commission (SEC) on Wednesday, state that financial institutions must provide a description of their pay plans and explain why they will not result in a “material financial loss”. Institutions with over $50bn in assets must also defer 50 per cent of executives’ salaries over at least three years and include clawback clauses.
But the rules are not nearly as detailed as those introduced by the FSA under an EU?mandate, and apply only to “executive officers”?rather than thousands of financial staff as in the UK.
Irving Henry of the British Bankers’ Association, an industry group, told City A.M.: “The US rules are far less prescriptive than the EU rules. It’s a lot less bureaucratic: you don’t need an entire internal rule book. It’s less time-consuming and less costly.”
The disparity will raise concerns that British firms could lose out in the fierce competition for talented recruits.