Knight: Pay row must end
ANGELA Knight, the chief executive of the British Bankers’ Association, yesterday called for an end to the public debate on remuneration and slammed a suggestion from Prime Minister Gordon Brown that pay could be capped as a percentage of profit.
Knight told City PM that the Financial Services Authority (FSA) and No. 10 Downing Street should focus on promoting the regulator’s new code on remuneration practices internationally, rather than carrying out a public debate on pay through the media.
“What the FSA has put forward is the most comprehensive code anywhere. We should seek international agreement on that,” she said.
“We should go for it collectively, rather than a lot of public discussion between authorities that would be better sorted out privately first.”
Knight was speaking after Prime Minister Gordon Brown addressed bonuses in an interview, suggesting that banks should be able to “claw back” payouts if long-term performance did not match rewards on offer to staff.
Brown also floated the idea that bonuses could be capped as a percentage of profit, but Knight was fiercely critical of the suggestion.
“If they move to a percentage solution, that’s much too simplistic, because business models operate in different ways,” she said.
“It has some of the benefits of simplicity but it has all of the flaws as well.”
Knight’s comments come just a few days after FSA chairman Lord Adair Turner suggested a global levy – known as a Tobin tax – to curb what he described as a “swollen” financial sector.
The Prime Minister and other world leaders will attempt to thrash out a global agreement on pay at the forthcoming G20 summit in Pittsburgh.