| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

Home 
 
 News
 Irish
 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 International
 Property
 Innovation
 
 Analysis/Comment
 
 Asia Economy

RSS FEED


How to use our RSS feed

Follow Finfacts on Twitter

 
Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.

Welcome

Finfacts is Ireland's leading business information site and you are in its business news section.

Links

Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News

Newspapers

Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News

 

Feedback

 

Content Management by interactivetools.com.

News : Global Economy Last Updated: Oct 21, 2011 - 9:21 AM


Big global banks are still paying guaranteed bonuses to new hires despite a ban
By Finfacts Team
Oct 21, 2011 - 7:39 AM

Email this article
 Printer friendly page

Big global banks are still paying guaranteed bonuses to new hires despite a ban agreed by G-20 countries in 2009.

On Thursday, a survey published by the Institute of International Finance (IIF), a global bank lobby group based in Washington DC, show that guaranteed bonuses accounted for 8.5% of the average bonus pool for 2010 at the 51 biggest global financial firms. This compares with 5.5% in 2009 and 7.1% in 2007. The IIF said guaranteed bonuses are used in the marketplace as a mechanism to compensate employees who leave their employers to work for a competitor for the lost unvested pay. As such, they contribute to a more flexible market for talent, but multi-year bonus guarantees are not consistent with the pay-for-performance principle and therefore the FSB Implementation Standards recommend that minimum bonuses should only occur in the context of hiring new staff and be limited to the first year.

The IIF said bonus guarantees to existing employees are also becoming less frequent. According to the survey results, the share of bonus guarantees to existing employees in the average bonus pool decreased from 2.8% to 2.2% in the 2010 compensation round from the year before.

The IIF put a positive spin on the survey which it claimed shows major progress towards full implementation of the global standards embodied in the Financial Stability Board’s (FSB) Principles on Compensation, issued in April 2009. “Survey results indicate that the trajectory of change is positive across the compensation agenda and that the wholesale banking industry is now focusing on practical and detailed implementation of the FSB’s Principles,” said Charles Dallara, managing director of the IIF, adding that “risk adjustment of compensation, deferred payouts and 'clawback' safeguards are now central to this reform.”

The survey was conducted by the IIF in collaboration with Oliver Wyman, an international management consultancy firm, and with input from the IIF Working Group on Compensation. This is the third and largest survey of its kind since the IIF developed its own broad principles for industry compensation practices in mid-2008. Oliver Wyman noted that the findings are based on responses from 51 leading financial institutions that together account for over 70% of the global wholesale banking revenue pool. The survey involved 26 firms in Europe, 14 in the Americas, 7 in Asia-Pacific, and 4 in the Middle East – Africa.

Compensation Reform in Wholesale Banking 2011: Assessing Three Years of Progress (pdf)

French Banks

The Wall Street Journal reports today that instead of making painful decisions years ago to set aside more money to cover unexpected losses, some of Europe's leading banks and supervisors devoted themselves to fending off tougher international rules and thwarting more-intensive supervision.

Many large banks around the world lobbied aggressively against tough new rules. But the French banks and regulators were at the vanguard, mounting an aggressive campaign of la résistance.

Journal says they hopscotched the globe petitioning against onerous banking rules. French banks often helped authorities devise key policies - - in contrast to countries like the US, UK, Switzerland and Spain that forced banks to raise tens of billions in new capital and to restructure. Sometimes, French bankers and government officials appeared to be reading from the same script.

Related Articles
Related Articles


© Copyright 2011 by Finfacts.com

Top of Page

Global Economy
Latest Headlines
Only one quarter of workers worldwide have stable employment contracts
Automatic Exchange of Tax Information: OECD says countries won't be able to game system
Gates Foundation loses in Swiss family's shares coup
Minimum wage levels in OECD countries
Brent oil benchmark over $68 a barrel - up almost 50% in 2015
Global growth slows and manufacturing dips to 21-month low
Family-controlled firms dominate European business
Top 10 of world’s 250 largest consumer products companies account for 30% of sales
Nine of world's 20 fastest growing economies in Africa
Globalisation maybe stalling as trade growth remains weak
Global growth prospects uneven across major economies says IMF
Emerging markets growth lowest since 2009; Global growth at 30-year average
China's economic rebalancing hitting Latin American economies
New York, London, HK & Singapore top global financial centres index; Dublin recovers
Global growth in modest expansion from low oil prices/ monetary easing says OECD
Composite leading indicators point to positive change in growth momentum in the Eurozone
Global labour market trends portend paradise for some but uncertainty for many workers
Vienna remains top of World Quality of Living Rankings in 2015; Dublin at 34
Zurich and Geneva overtake Singapore to become world's most expensive cities
HSBC Switzerland and Falciani: How it happened
Global economic power to continue shift from advanced economies
Global food price index falls in January; Cereal output set for record
Global debt has risen $57tn or 17% of world GDP since 2007
Tokyo with 36m people safest of 50 world cities; Stockholm safest in Europe
China overtook US in 2014 inward investment; Ireland slips on dodgy tax data
Global fund managers turn to US equities, bonds and real estate
Is World Economic Forum in Davos really serious about tackling inequalities?
IMF cuts global growth in 2015 despite cheaper oil, faster US growth
Quick guide to what’s happened to the Swiss franc
IMF's Lagarde warns of ‘lopsided’ global growth despite cheap oil
Global growth at risk of long-term slowdown says study
Private consumption main driver of OECD GDP growth in Q3 2014
Swiss financial centre reforms work in progress as banking secrecy collapses
Fragile global economic recovery faces major risks says World Bank
Global food prices fell in 2014 for third straight year; Meat rose to record high
Commodities Supercycle: Real food prices in 1980 - 2000 were as low as 1930s - Part 2
Commodities price supercycle ends after century of price falls - Part 1
Growth rate of global manufacturing slowed at end of 2014
Global GDP boost from low oil prices in 2015 at 0.1%
Argentina, China head 2014 share price index rises; Denmark best of developed countries