Group demands overhaul of bonuses

It can no longer be “business as usual” for banks when they decide how much to pay out in bonuses this year, an influential shareholder group warned today.

By The Newsroom

Published 6th Dec 2011, 08:00 BST

In a letter to all UK-listed banks, including Lloyds Banking Group, Barclays, Royal Bank of Scotland and HSBC, the Association of British Insurers (ABI) called for an overhaul of the way the companies determine pay packets.

Plunging share prices have hit investments while the payment protection insurance (PPI) scandal and eurozone debt crisis have dented bank profits and as a result the ABI said it expects to see lower bonus pools and individual awards.

Otto Thoresen, ABI’s director general, said: “It is essential that all banks take, and are seen to take, a responsible approach.”

The mounting pressure comes ahead of next February’s banking results season when bankers’ bonuses will be revealed and are expected to provoke further outrage, despite being lower than previous years.