The online survey of the CISI’s global membership found only 6% believe politicians should determine the level of bankers’ bonuses, while a further 36% consider that the responsibility should fall to the firms’ directors.
Just 4% suggested that the UK Parliament should have a say on bonuses, double the figure supporting EU having decision-making powers in the area.
In the latest edition of CISI’s member magazine Securities & Investment Review, chief executive Simon Culhane said he acknowledged some banks do have a case to answer for the economic mess, but that it was “only a select few at the top of the banks who dashed for quick cash”.
Culhane also denounced the “contamination” of the word bonus and argues there is nothing wrong in paying a bonus.
“Perhaps it’s time we spoke more about ‘performance pay’ that flexes according to the year end result and reflects the contribution of the individuals and the organisation, is gradually paid out over an extended period and remains at risk during that time.”
Culhane added that policies which mean bonuses are now taking longer to pay out, higher numbers of ‘clawbacks’ and greater disclosure, mean that interference now, when these reforms are in place and starting to work, is simply “meddling”.
The comments follow a vote in Brussels last week at which all 26 finance ministers from the European Union, bar the UK, voted in favour of introducing a cap on bankers bonuses. One of the biggest advocates of the move was Austrian MEP Othmar Karas.
“With what logic and under what authority has a group of Austrian MEPs (hardly a country renowned for its financial acumen) been able to persuade its fellow MEPs that they, not the UK Government or the bank’s shareholders, have the right to determine, unilaterally, the composition of pay for the employees of banks which operate in the EU?,” said Culhane.
“Banks can still pay people what they like, but will now have to pay a higher proportion of remuneration in salary. All this does is increase a bank’s core cost base; therefore perversely, driving up salaries and making London less attractive as a financial centre, whilst hurting the UK economy.”
