While the beginning of 2014 saw the emergence of an EU-wide cap on bonuses, the rest of the year appears to have been devoted to finding ways around it.
Regulatory Technical Standards adopted by the Commission in March 2014 establish that [f]or performance from 1 January 2014 onwards, the variable component shall not exceed 100% of the fixed component of the total remuneration of material risk takers. Under certain conditions, shareholders can increase this maximum ratio to 200%.
Without the possibility to award massive ad hoc compensations, many UK banks introduced rise in base salaries.
London-based Financial Conduct Authority (FCA) is now looking at options to force reckless bankers to repay their base salary and bonuses. Martin Wheatley, FCA’s chief executive, said that “anecdotal evidence gathered by the FCA showed bankers’ fixed pay had increased by 100 per cent since 2008”.
The FT also reports that the European Banking Authority is expected to pass new guidelines on banker’s pay in March 2015.
Read here what Mark Carney, the Bank of England governor, said about banker’s pay back in November 2014.