Gap between UK and US bankers’ bonuses widening as EU rules bite
The gap between bankers’ bonuses in the UK and US is widening due to EU rules on bonus caps.
Bankers in the UK have seen their bonus pool shrink nine per cent over the last three years, falling to the same level it was in 2008 at $19.6bn (£15bn).
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By contrast the US bonus pool in 2017 was the largest since 2007 and over the last 10 years has increased 78 per cent from $17.6bn to $31.4bn, research from law firm Linklaters showed.
Linklaters employment partner Alexandra Beidas said the UK had instituted a tougher regime on bonuses than other countries when implementing regulations drawn up by the G20’s financial stability board.
“You have a scenario where the EU went full steam ahead, the UK gold plated the rules, parts of Asia just brought in guidelines and the US is still sitting on draft versions,” she said.
“It’s no secret that US bankers have historically been paid larger bonuses than their European counterparts but it’s a bitter pill to swallow when you can see that some regulators are being quite tough on financial institutions and others less so. It seems that the UK’s financial sector really has ended up with the toughest rules anywhere in the world,” she added.
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The EU bonus cap limits bonuses paid to no more than 100 per cent of fixed salary or 200 per cent of fixed pay with shareholder approval.
It was introduced in the aftermath of the financial crisis with the aim of quelling public anger at high pay for bankers.