Bonuses: Money for nothing?
- Executive pay policies should be designed with a clear link to a sustainable business strategy
- Incentive payments should be linked to performance and risk, be proportionate to achievement and be balanced between short-term and longer-term elements
- Regulatory compliance is essential but a secondary consideration
Executive pay is under intense scrutiny internationally by governments, the media and social commentators. But with the right strategy to underpin remuneration schemes, you can reinforce behaviours that create long-term sustainability and reassure stakeholders in the process. Nick Topazio explains.
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The Bottom Line:If Mr Cable has his way...
"If Mr Cable had his way, all the big banks would be broken up and bonuses would be virtually eliminated - a sure-fire way in my view of guaranteeing an end to the UK’s ability to compete as an international financial centre. Let’s not forget that this is a man who is on record as saying that everyone who works in a bank has an ‘aristocratic lifestyle’ clearly demonstrating his lack of understanding of the sector." A tough line on bankers’ bonuses could make a brain drain of financial talent a distinct possibility, warns Paul Marsden. Read more