Wealth Manager - the site for professional investment managers

Register to get unlimited access to 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
CIO Tapes 2: two warnings and a lot of optimism

CIO Tapes 2: two warnings and a lot of optimism

Our group of leading asset management CIOs see a lot of opportunities – and overseas investors are buying UK too

Play Wealth Manager Retreat 2017: size isn't everything

Wealth Manager Retreat 2017: size isn't everything

We asked our delegates at the Wealth Manager Retreat what they think about the recent wave of consolidation in the industry.

1 Comment Play CIO Tapes - part 3: 'passive funds are anti-capitalist'

CIO Tapes - part 3: 'passive funds are anti-capitalist'

Citywire recently gathered three of the UK's leading fund investment heads to discuss their hopes, fears and the issues that their jobs throw at them daily.

Read More
Your Business: Cover Star Club

Profile: Thomas Miller explains its post-restructure plans

Profile: Thomas Miller explains its post-restructure plans

Thomas Miller Investment’s (TMI) head of wealth Matt Phillips has strong opinions about many things

Wealth Manager on Twitter