Bonus Pay Turmoil in London!!
The Financial Times reports that banks’ attempts to sidestep the EU bonus cap could be about to go disastrously wrong just months before the 2014-15 bonus round. It’s all down to the European Banking Authority, which has finally come good on its threats to clamp down on cash allowances. If cash allowances are to be allowed, the FT reports that they will need to be i) awarded for a set period and impossible to adjust midterm without staff consent, ii) to include no forfeiture provisions if someone quits, iii) to be attached to a job rather than a person. Points i) and ii) sound like good news for bankers who’ll then be assured of receiving allowances and can switch jobs without paying them back. Point iii) sounds more dubious. – The FT says everyone with the same job title would need to receive exactly the same allowance and salary, with capped bonuses the only element of performance-related pay. Banks have three months left to devise job titles that discriminate on the basis of performance and to categorise people accordingly.