UK vow to fight EU crackdown on bonus pay

Tim Wallace
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BRITAIN is set for another row with the EU over financial services, as the government plans to reject plans for a cap on bankers’ bonuses at a key meeting today.

European leaders want bonuses – including cash and shares – to be capped at three times basic salary, with the cash component limited to the level of the basic salary.

The EU aims to finalise the plan by 4 December, when finance ministers have their next meeting.

But the UK rejects the plans as heavy handed and unnecessary, instead favouring an approach aimed at ensuring pay reflects performance.

“The government is committed to tackling unacceptable bank bonuses and has already developed a framework of deferral and clawback requirements designed explicitly to reduce the incentives for excessive risk taking,” said a Treasury spokesperson.

“The government is supportive of a flexible approach that allows individual firms’ shareholders to set and monitor remuneration packages and is engaging proactively with European discussions.”

Meanwhile the European Parliament wants an even tougher limit, capping bonuses at the same level as the basic salary.