Amongst its recently-announced proposed package of banking reforms, the UK Labour party has suggested that claw-back on bankers’ bonuses should be extended to ten years from the date of payment.
With effect from 1 January this year, the Bank of England’s Prudential Regulatory Authority imposed a mandatory claw-back period of seven years from the date of award of variable remuneration, on which we have previously reported. It followed on from the UK Government’s unsuccessful challenge to the legality of the EU capping of bankers’ bonuses covered by us last November.
In addition, shadow chancellor Ed Balls has supported the suggestion made by Mark Carney, governor of the Bank of England, that not only should variable remuneration be subject to claw-back, but also bankers’ fixed pay.
If the period of claw-back was extended to 10 years and fixed pay was included, the amounts at risk would be commensurately larger. So it would become even more crucial to resolve fully the tax position of individuals from whom sums were recovered (see our previous post on this topic for details). Uncertainty all round ….
