Eight major banks broke EU bonus cap rules last year and will have to change the way they pay their top staff this year.
The European Banking Authority (EBA), which oversees banking regulation across the EU, examined the bonus policies of 35 firms, but said in some cases it could not reach a conclusion because not enough information was provided.
The EBA was scrutinising the top-up payments that major banks have been making to senior bankers since the introduction of the EU cap on bonuses. That cap limits bonuses to 100% of salary or 200% if shareholders give their approval. The payments, often known as role-based allowances, were introduced after the cap came into force. The banks insisted they were not salary or bonuses and therefore exempt from the rules. But the EBA concluded they had to be classed as one or the other.
The EBA data showed that 15 member states had allowed banks to ask shareholders for approval to make 200% bonus payouts. The EBA’s report shows that some 15,000 bankers in the EU fall within the scope of the bonus cap.
The EBA did not identify any of the banks involved but they are likely to be investment banks.
The Bank of England – which has opposed the bonus cap, arguing that it pushes up fixed pay – said all the banks it regulates had complied this year.
Additional allowance payments were introduced by several major UK banks, including HSBC, Barclays and Royal Bank of Scotland. Some of the schemes have been changed to comply.
