Myners calls on investors to enforce a bonus clampdown
CITY minister Lord Myners yesterday called on institutional investors to clamp down on bumper bonuses across the whole banking sector as he outlined Treasury plans to replace cash bonuses with equity-based payouts for high-earning staff at part-nationalised Royal Bank of Scotland and Lloyds Banking Group.
RBS and Lloyds have agreed to halt all discretionary cash bonuses this year for staff earning over £39,000 per annum, as part of their negotiations with the government on preserving financial stability.
Executive board members at both banks will also forego all 2009 share-based bonus payments for three years, at which point the payouts will still be subject to full clawback.
Myners said yesterday he was prepared to get “tough” on excessive banking remuneration, saying: “We are bearing down on the most dangerous and unjustifiable aspects of the bonus structure.”
He added: “Institutional shareholders need to show much more visibility on the issue – they are content for the government to be pressing the case but we expect them to be much more challenging than they have been in the past.”