Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

Bonus clawbacks unenforceable, says BBA

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 or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Where A-rated Pattullo is finding the best bond opportunities

Where A-rated Pattullo is finding the best bond opportunities

Henderson Global Investors head of retail fixed income explains how he is managing his fund against the surprise current monetary policy divergence.

1 Comment Play Taxicab Tenner: Allianz Global Investors' AA-rated Simon Gergel

Taxicab Tenner: Allianz Global Investors' AA-rated Simon Gergel

Our much anticpated new series is here! We hand a black cab driver a tenner and grill the manager of the 125-year Merchants trust until the meter runs out.    

Play Europe bulls, a retail boost and why a little inequality can be a good thing

Europe bulls, a retail boost and why a little inequality can be a good thing

This week’s Investment Pulse looks at whether investors should be bullish on Europe, the surprise rise in UK retail sales and if a little inequality is a good thing.

Your Business: Cover Star Club

Profile: meet the duo at the heart of Hargreave Hale's succession plan

Profile: meet the duo at the heart of Hargreave Hale's succession plan

For the first time in the company's history a non-Hargreave is now at the head of the north west broker and asset manager

Wealth Manager on Twitter