UK bank share­hold­ers may get vote on size of bonus pools

The Pak Banker - - Front Page -

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

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