The City watchdog has delayed its annual bonuses for top officials pending a report into how it handled the collapse of London Capital & Finance investment fund.
In its annual report published today, the Financial Conduct Authority said: “This investigation is ongoing and, as a result, the Remuneration Committee has decided that performance bonuses awarded to voting members of the Executive Committee in respect of the year under review should be deferred until the report of the investigation has been issued”.
“The Committee will then decide whether it is appropriate for the bonuses to be paid at all, in whole or in part.”
London Capital & Finance went into administration in 2019 following action by the regulator directing the fund to withdraw its promotional material on the basis that the marketing for its retail investment products was misleading.
The Economic Secretary to the Treasury then asked for an independent review into the circumstances surrounding the demise of the fund.
The Remuneration Committee also said today it would change the way performance bonuses will be paid in future. Bonus payments will now be paid in two instalments, with 40 per cent of any award paid in March and the deferred amount paid the following April.
Bonus funding made up 15 per cent of the regulator’s salary bill which has now been reduced to 12.6 per cent.
“The Remuneration Committee may decide in its absolute discretion that the deferred amount should be reduced or not be paid at all as a result of circumstances arising or new information being available after the date of the award.”
Charles Randell, chair of the FCA said the regulator had been “prepared for a year of change and challenge, and the year certainly brought those.”
“To ensure that we are able to meet the challenges ahead, we will continue to transform our own organisation, building on lessons from our rapid response to the coronavirus crisis.”