No gold bars but higher salaries for London bankers with bonus cap
By Steve Slater
LONDON (Reuters) - In the 1990s, London-based investment banks rewarded top employees with gold bars, fine wine and oriental carpets to dent the impact of higher payroll taxes.
Now, with public anger at banking excess near all time highs, they are looking at less flashy ways to cope with curbs on bonuses, including a new monthly allowance.
European rules due to take force in January say bankers' bonuses cannot exceed annual salary, or twice that if shareholders approve, to curb the sort of excessive risk-taking blamed for the 2008-09 financial crisis.
Salaries have not dropped in line with banks' revenues since the crisis, consultancy McKinskey said this month, despite a series of huge, taxpayer-funded bank bailouts.
At least 10,000 bankers, most of them in London, take home more than half a million euros ($678,700), according to industry sources, more than 10 times the average wage in wealthier European states.
With much of pay currently in bonuses, the biggest banks in London, including Deutsche Bank, Barclays and JP Morgan, look certain to bump up salaries.
Britain and the banks in what is Europe's financial capital argue the new rules play into the hands of competing financial centers such as New York, Hong Kong and Singapore.
They also say it provides less scope to claw back pay if it turns out an individual had taken too much risk, and limits the ability to pay bonuses in shares awarded in the future. Continued...