Bloomberg reports that the compensation reform bill introduced by Senate Banking Committee chairman Christopher Dodd Tuesday has been described as 'a toothless tiger' which will do little to impact investment banker pay and rein in excesses. The bill still only provides corporate boards advisory responsibilities on compensation, and recommendations can still be ignored by management.
In the meantime, The Daily Telegraph reports that Barclays Capital is thought to be considering increasing staff base salaries, with senior bankers in line for increases up to £200,00 ($333,000). The move would be made to compensate staff for the fact that most future bonus payouts are likely to be made in deferred equity, which could vest up to 5 years out.
And Reuters reports that Commerzbank has unveiled a revamped bonus plan. Bonuses for senior staff from 2010 will be paid in deferred stock vesting over 3 years. There will also be a 'claw-back' provision, which will kick-in in the event that the bank itself puts in a poor performance.
Finally, the news agency reports that Swiss regulators have confirmed that new compensation guidelines will come into force from 1st January. These will broadly be in line with the commitments given by the G20 group of countries, which provide for the increased use of deferred equity as a means to rein-in excessive risk taking. Credit Suisse has already aligned its new compensation guidelines to the G20 requirements, although UBS has yet to finalize its compensation procedures, viewing 2009 year-end as a transitional year for pay.