“Today’s agreement on a bankers’ bonus cap will usher in a much needed culture change” – BOWLES

Final agreement on a cap for bankers' bonuses will be reached tonight in Brussels with the completion of the last trialogue negotiation between the European Parliament and European Commission.

New rules on bonuses, incorporated in the updated Capital Requirements Directive (CRD), include:

• A salary / bonus ratio of 1:1 which can be raised to 1:2 with a shareholder vote of 65% if there is a 50% quorum or 75% vote if no quorum applied.
• Up to 25% of the bonus can be paid in long-term instruments (deferred for five years) linked to the capital, and therefore stability, of the bank.*

Sharon Bowles MEP, who chairs the European Parliament's Economic and Monetary Affairs Committee and who led the trialogue negotiations on CRD*, said:

"A cap on bankers' bonuses is not a punishment for bankers but a realignment of the work / reward ratio.

"Anyone receiving their annual salary, or twice their annual salary, as an additional bonus should not complain they are not sufficiently rewarded for their work.

"The mass exodus from the City of London by disgruntled bankers demanding the astronomical bonuses of yesterday remains to be seen and I am sure fair-mindedness will prevail.

"Today's agreement on a bankers' bonus cap will usher in a much needed culture change, not just for the City of London, but for the rest of Europe too."

ENDS

*On the table is a mechanism to allow the 25% to increase for longer deferment, to be decided this evening.

*In addition to bonuses, Sharon led the way on a growth package within CRD that helps trade and SMEs through various technical amendments.

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