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From 2014, senior asset management staff at banking organisations will see bonuses capped at 100 per cent of fixed salary, or 200 per cent with shareholder approval, under changes to the EU’s Capital Requirements Directive.
Although just a handful of asset management professionals are currently subject to CRD rules, the European Banking Authority wants to widen the definition of code staff or material risk-takers to include anyone earning above €500,000, inclusive of bonuses. The EBA also wants the cap to apply to bank staff earning a bonus of more than €75,000 when that represents more than 75 per cent of fixed pay. This move would broaden the range of employees it applies to significantly.
Some EU Member States, including the Netherlands and Italy, are likely to apply stringent pay caps across the entire financial services sector, including independent fund groups. Others, such as Germany and the UK, are likely to limit ceilings on bonuses to bank-owned entities.
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