UK bank shareholders may get vote on size of bonus pools
LONDON: Bankers have floated the idea that their shareholders should be given a vote at annual meetings on the size of their bonus pools.
As banks attempt to defuse a row in the new year over bonuses, they are suggesting shareholders should get a vote on the payouts, in addition to the vote they received eight years ago on the overall remuneration report, which outlines pay policies for board directors.
The banks made their suggestion to ministers as they prepared to make multimillion-pound payouts to staff in the new year. Royal Bank of Scotland is thought to be hoping to give £1bn to its investment bankers, including cash bonuses to higher paid staff for the first time since it was bailed out by the taxpayer in October 2008.
Barclays will have accumulated almost £3bn if it has continued to amass bonuses at the same rate as the first nine months of the year, when it revealed that £2.2bn had been set aside for annual bonuses and payments deferred from prior years.
Banks set aside payments for bonuses during the year but only decide at the end of the financial year the size of bonuses that will be paid.
By giving shareholders a separate vote on the bonus pools, the bank directors might be hoping to distance anger about bonuses for investment bankers from concern about the size of their own pay, which is detailed in the remuneration report. But it is far from certain that shareholders would be keen to be offered a separate vote as this would then put the onus on them to approve the huge payments, or that ministers would approve the idea.
Under current rules, votes on the remuneration report are advisory and cannot force directors to hand back cash.-PB News