Basel Committee seeks detailed rules on bank pay
Global banking supervisors tackling issues like bonuses, which drew ire during the economic crisis, said banks should disclose how an individual's pay is linked to the firm's performance, including longer-term profitability.
Under new proposals, banks would disclose qualitative and quantitative information about their remuneration practices, the Basel Committee for Banking Supervision said on Monday in a consultative document.
The Committee believes that these additional Pillar 3 requirements on remuneration will support an effective market discipline and will allow market participants to assess the quality of the compensation practices and the quality of support for the firm's strategy and risk posture, it said.
Banks would also need to disclose the number and total amount of guaranteed bonuses paid during the financial year and the total amount of outstanding deferred compensation.
Comments on the document can be submitted until February 25, 2011.
Last week, Goldman Sachs Group Inc established a new long-term bonus plan that lets the board award cash and stock on top of existing compensation, but lets the firm take back money if the employee takes too much risk.
The plan is intended to reward executives if the bank performs well long term, and ensure the firm does not take imprudent risk.
(Editing by John Stonestreet)
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