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Boris Johnson spokesperson says ‘no plans’ to change cap on executive pay

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City bosses have rejoiced after a long-term funding deal was agreed by the central government and TfL.
City bosses have rejoiced after a long-term funding deal was agreed by the central government and TfL.

Boris Johnson’s official spokesperson has said there are “no plans” to change a cap on executive pay.

On Tuesday morning, the PM’s spokesperson added: “I think the issue being investigated is how non-executive directors are paid, rather than what the CEOs or directors are paid.”

Ministers were mulling changes relating to “people being able to invest in shares.”

“Individuals are already encouraged to invest in the companies with which they are non-executive directors, but there are some restrictions on share ownership that are being explored. I’m not aware of any plans to [ditch the bankers’ bonus cap],” they said.

Such changes could “ensure these individuals are more invested in the success of the companies they are involved in which helps generate jobs, growth and investment.”

In October last year, CityA.M. revealed that the UK was set to keep the EU’s cap on bankers’ bonuses, with the Treasury instead focussed on a range of other measures to shake up financial services regulation post-Brexit.

At the time, Treasury sources said the measure was not even being discussed by chancellor Rishi Sunak and that it would not be scrapped any time soon.

The cap, which was introduced by Brussels after the 2008 financial crash, sees bankers’ bonuses limited to no more than 100 per cent of their fixed pay or double that with explicit shareholder approval.

According to a report in the i newspaper on Monday evening, the Cabinet Office minister Steve Barclay has written to the Chancellor calling for “deregulatory measures to reduce the overall burden on business”.

It was reported this would mean slashing restrictions on director and non-executive director remuneration, in a bid to attract more firms to the UK in the wake of Brexit.

“I trust you’ll agree this is a more proportionate regulatory response and reflective of the new approach to regulation outlined in the ‘Benefits of Brexit’ publication in January,” a leaked copy of the letter reportedly said.

The reported plans were criticised as unsavoury amid a cost of living crisis, with economists warning of a recession looming.

Top bosses in the Square Mile have been calling for curbs to be scrapped for many months and have previously said they represented a potential fresh 1980s-style “big bang” moment.

“Bonus caps were a perfect example of how the EU led over prescriptive regulation,” Daniel Hodson, chairman of The CityUnited, told City PM earlier this year.

“Neither firms nor employees will be sorry to see the end of them, rejoicing in the benefit of Brexit restored independence,” he added.

London Stock Exchange boss Julia Hoggett has also said that the City needed to have a “grown up conversation” about remuneration if top firms are to continue to do business in the UK.

The Department for Business, Energy and Industrial Strategy (BEIS) said it was looking at “whether there are any unnecessary restrictions on paying non-executive directors in shares, which could ensure they are fully invested in the success of the company they run”.

“If the company does well, directors do well,” they added.