Fund managers take long view by scrapping bonuses

August 23, 2016

Star investor Neil Woodford is paying his staff fixed salaries, while former trade body head Daniel Godfrey is launching a trust on the same principle. Fund costs won't necessarily fall. But a bonus system can prompt unhelpful short-termism while ratcheting up overheads.

John Thain’s M&A-linked pay cut sets good example

March 22, 2016

CIT docked its departing CEO’s bonus by 30 pct for poor integration of 2015’s $3.4 bln purchase of OneWest. The lender was less disciplined about Thain’s retirement pot, but others could usefully embrace the idea that failures in deal execution should factor into bosses’ pay.

Barclays’ bonus-free vision not entirely utopian

October 23, 2015

The UK bank’s outspoken chairman is right: huge annual bonus payments warp behaviour. But John McFarlane is also right that Barclays can’t scrap them if rivals don’t. Banks are unlikely to club together on this point, but regulators still could. The U.S. is the laggard.

VW could use bank-style clawback of CEO pay

September 23, 2015

Martin Winterkorn’s resignation clears the way for sweeping changes at the sprawling carmaker after its costly emissions scandal. He was one of Germany’s best-paid bosses. Revamping compensation, and even trying to recoup some of the CEO’s cash, would send a strong message.

Barclays’ trading woes offset pay restraint

March 3, 2015

The UK bank has cut investment bank bonuses by a quarter, atoning for a PR gaffe last year when pay rose despite a drop in profit. But 2014 results show returns in the unit are also lower. To maintain its turnaround, Barclays may have to shrink the misfiring division further

More Wall Street CEO cash is hint for shareholders

January 23, 2015

JPMorgan is paying a portion of Jamie Dimon’s bonus in hard money for the first time since 2011. Goldman is boosting Lloyd Blankfein’s cash. Meanwhile, stock gains are slowing. Bank bosses still get most of their comp in shares. But the switch may suggest equity has less to offer.

Banks risk provoking EU with bonus get-arounds

September 2, 2014

Firms are paying top staff extra “allowances” in response to European bonus caps. That avoids raising base salaries and keeps costs flexible. The risk is that successful avoidance of the rules will prompt policymakers to shift the attack to pay quantum rather than pay structure.

UBS rogue trader a chance to test bonus clawbacks

September 20, 2011

Will UBS’s rogue trader leave staff with a “doughnut” bonus? The investment bank’s employees, already facing thousands of job losses, fear the $2.3 billion trading loss will wipe out this year’s payments.

UK Investors’ bank bonus campaign needs teeth

December 7, 2011

The Association of British Insurers has asked the UK’s five largest banks to cut compensation to the point where returns exceed the cost of equity. The request is reasonable. But it will only work if shareholders are also prepared to vote against directors who don’t respond.

Bank CEO pay suggests Wall Street may be waking up

January 23, 2012

The latest stock awards to Jamie Dimon, James Gorman and Vikram Pandit can’t be called austere but also don’t ignore the post-crisis contempt over excessive bonuses. So far, there’s nothing that should outrage investors or employees. But there are also still cash payouts to come.