THE European Commission has formally agreed to consider a request from chancellor George Osborne seeking support for common rules on the disclosure of bankers’ bonuses in a move that will delay the introduction of such pay regulations in the UK.
Osborne is seeking to link the introduction of rules on transparency in the UK – which would force banks to reveal details of £1m-plus bonus payments – to a European Union-wide agreement covering Frankfurt, Paris and other EU financial centres.
Osborne’s request comes after pressure from banks who had warned that the strict interpretation of the rule that caps the upfront cash component of large bonuses at 20 per cent, with the rest paid in shares or deferred – could see UK banks struggle to hire as their terms were less attractive.
Another fear is that the rule could leave bankers with no bonus cash at all as the 50 per cent tax rate would be applied not just to the recipient’s upfront cash award, but also to share awards.
The decision means British banks will not face new disclosure rules during the bonus rounds in February and March.