What should banks disclose about bonuses?
The debate about top bankers’ bonuses is unlikely to go away any time soon, with another round underway. Despite suggestions that the amounts to be paid out will be ‘restrained’ in some way, the figures involved will still look eye-wateringly large to anyone outside the City’s exclusive corporate dining rooms – evidence of just how detached from reality the financial sector still is, despite what should have been the ultimate wake-up call when the entire sector tottered on the edge before tax payers bailed them out. Earlier this year, the Chancellor was reported to have ruled out a tough regime of disclosure, despite howls of outrage. But now, an unlikely source does seem to have realised that something must be done. Step forward those socialist revolutionaries, the Basel Committee on Banking Supervision, part of the Bank for International Settlements, which groups the heads of central banks like the Bank of England. They have issued a public consultation paper on ‘disclosure requirements for remuneration’ (the deadline for submissions is 25 February) setting out a series of disclosures that banks (probably above a certain size – but we need to ensure that hedge funds are in there) should make about bonuses, the processes used to decide them, and the terms under which bonuses are paid. They are only proposing to ask banks to disclose the totals paid, the number of staff receiving bonuses and so on, but this is a start, and the public consultation allows for other ideas to be suggested – such as naming the people receiving the highest bonuses (eg those paid more than 10 or 20 times the lowest wage in the bank) or demanding that banks set out the bonuses paid broken down by the gender of the recipient. So, send ideas to [email protected] or to the Secretariat of the Basel Committee on Banking Supervision, Bank for International Settlements, CH-4002 Basel, Switzerland.