Twitter icon Email alerts icon Latest News RSS icon Magazine icon Stay connected:

View the article online at

Bonus clawbacks unenforceable, says BBA

by Danielle Levy on May 15, 2014 at 08:19

Bonus clawbacks unenforceable, says BBA

The British Bankers Association has branded Bank of England proposals to claw bank banker bonuses as unenforceable.

The Financial Times reported that the lobby group has concluded the proposals could be deemed illegal in countries where UK banks operate, including Germany, France, Brazil and Mexico, as they conflict with existing employment law. Even in countries where the proposals are not illegal, such as in the UK, the BBA highlighted that firms could face problems implementing the proposals where they do not have the flexibility to vary existing contracts.

Under Bank of England proposals, submitted in March, bankers could be forced to return bonuses up to six years after receiving them and as much as a 11 years after a bonus was awarded.

'Whilst clawback may be legally possible, the actual ability to enforce clawback will be dependent on the decision of a court to enforce clawback clauses in employment contracts,' said the BBA submission, which was seen by the Financial Times.

The BBA also argued the requirement for retrospective clawback provisions would be difficult to impose. Instead it said the new rules should apply to variable remuneration after 1 January 2015.

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

Sponsored Video: Bringing it all back home

As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.

Today's top headlines

Sponsored Video: Barings on investing in Frontier Markets

From Nigeria to Pakistan and from Kenya to Kuwait, frontier markets are catching investors' attention as never before.

More about this:


On the road

Click here to find out more from the Audience Development team.

Sorry, this link is not
quite ready yet