Keeping your bonus might just have got a lot tougher

They are out to get you!

The Bank of England (BoE) has put forward plans which would enable bankers' bonuses to be clawed back even after they've moved to a new employer.

The Bank's Prudential Regulation Authority (PRA) said it would address the issue of buy-outs, a firm compensates a new employee for any unpaid remuneration that is cancelled when they leave their previous firm.

Buy-outs effectively enabled individuals to evade accountability through withholding or reducing unpaid awards or recouping paid awards.

"Today's proposals seek to ensure that individuals are not rewarded for bad practice or wrong-doing and should help to encourage a culture within firms where reward better reflects the risks being taken," Andrew Bailey, deputy governor for prudential regulation and chief executive of the PRA, said.

It represents an addition to addition to current remuneration rules which seek to ensure greater alignment between risk and reward, discourage excessive risk-taking and short-termism and encourage more effective risk management.

"Having the right incentives is a crucial part of an effective accountability regime," Bailey said.

"Remuneration policies which lead to risk-reward imbalances, short-termism and excessive risk taking undermine confidence in the financial sector."

"Individuals should be held accountable for their actions and not be able to actively evade the consequences of their actions."

Full story: The BoE wants tougher bonus clawback rules: City A.M.

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