PwC pay expert comments on Treasury legal challenge to EU bonus cap

Published at 10:20 AM on 26 September 2013

Tom Gosling, head of PwC's reward practice, said:

"It is clear that a cap on bonuses will lead to higher fixed pay, which reduces boards' ability to control costs and also weakens the link between performance and pay.

"Banks will certainly applaud this action if it means the rules are abandoned, but the uncertainty created in the meantime won't be welcome. Most banks want to get on with implementing the new rules and providing clarity to employees. The concern is that this new development will just extend the period of uncertainty, which could damage employee retention, especially for staff outside of the EU.

"There's also a risk that in the short term it could be harder for the UK to win concessions in the definition of Material Risk Takers - the people caught by the cap - which is being considered by the European Banking Authority. Regulators from other EU states may now take a harder line in those negotiations."

For more information please contact Amy Tiernan, media relations manager, on 020 7804 0556 or [email protected]


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