June Budget – Bank bonuses
The Budget Red Book notes that the Government is taking action beyond the introduction of a bank levy so as to tackle “unacceptable bank bonuses”.
The Government will be consulting on a remuneration disclosure scheme. They will also work with international partners to explore the costs and benefits of a Financial Activities Tax on profits and remuneration.
The Government has also asked the Financial Services Authority as part of its forthcoming review of its Remuneration Code to:
– consider imposing more stringent requirements on the deferral and award of variable pay;
– examine mechanisms for strengthening the link between performance and remuneration to ensure that incentives are aligned with the long-term performance of the firm; and
– consider how to vary capital requirements to offset risk in remuneration practices.