EU bonus cap may now hit UCITS funds

Our careers reporter Chris Harlow:

Now, the European parliament is supporting inserting the curbs into a reform proposal for the pay of managers of UCITS funds (a popular investment product). The parliament’s draft would reportedly limit bonuses to 100 per cent of salary, and require up to 60 per cent of variable pay deferred and largely paid in units of the fund the manager runs.

If the reforms are passed unchanged, this could set a precedent for remuneration policy both in the asset management industry and throughout the financial services sector. John Terry, partner in PwC’s reward team, says that these developments “further widen the gap between pay practice in the US and Europe.”

Terry also says that insurance companies watching regulations on pay hit the banks, hedge funds and asset managers should be worried. They “will now be concerned that it could only be a matter of time until similar regulations affect them”.

(Full article)