Unlock Exclusive Insights with the Editor’s Picks
In an ever-evolving financial landscape, staying ahead of the curve is essential. Roula Khalaf, Editor of the FT, handpicks the most intriguing stories of the week in the Editor’s Digest newsletter. Let’s delve into the latest developments shaking up the banking sector.
- Barclays takes the lead: Breaking away from the norm, Barclays has decided to ditch the bonus cap imposed by the EU, becoming the trailblazer among British banks. This move comes on the heels of the UK’s decision post-Brexit to eliminate these restrictions, signaling a new era in banking compensation policies.
- Shifting bonus structures: JPMorgan and Goldman Sachs have already announced plans to raise bonuses for their UK staff. Barclays is set to follow suit by adopting a model that allows bonuses for senior staff, aka material risk takers, to reach up to 10 times their fixed pay. This shift aims to bolster competition among banks in attracting and retaining top talent globally.
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Different strokes for different folks: While Barclays opts for a bonus increase while maintaining base pay, Goldman Sachs takes a different route by slashing base pay but increasing the bonus ratio to 25 times. These contrasting strategies reflect the diverse approaches banks are taking to navigate the changing regulatory landscape.
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Global implications: The removal of the bonus cap in the UK not only impacts domestic banks but also raises concerns among their European counterparts. Banks in the EU, still bound by the two-times fixed pay limit, fear losing their competitive edge in hiring top talent. The ripple effects of these policy changes are reverberating across the financial sector.
As banks adapt to the evolving regulatory environment, the focus remains on striking a balance between rewarding performance and adhering to regulatory frameworks. The restructuring of bonus policies not only signals a new era in banking compensation but also underscores the competitive dynamics at play in the global financial sector.
Stay informed, stay ahead, and unlock exclusive insights with the Editor’s Picks.
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