Top Firm Said To Rethink Huge Base Pay Hikes

The Times reports that Barclays Capital is thought to have had to rethink its plans to increase base pay by as much as 150%, 'amid fears that the rises may contravene the UK government's new tax on bonuses'.

The firm is said to have been on the verge of sending out new salary advices, when lawyers pointed out that the new pay increases could contravene the anti-avoidance measures included in the bank bonus tax, which was announced (and came into effect) Wednesday.

In the meantime, Barclays President Bob Diamond told The Sunday Telegraph that the bank is to pay 60% of this year's bonuses in deferred equity.

And The New York Post reports that, although Goldman is still likely to pay out decent bonuses this year, the firm is unlikely to be setting new records. Goldman is paying its top 30 executives all out in stock this year, and a large proportion of bonuses for employees is also likely to be made in deferred equity. No decision on the total size of the bonus pot, however, will be made at least until the end of the month.

Finally, Bloomberg reports that US pay czar Kenneth Feinberg has imposed a $500,000 salary cap now on the 100 highest-paid employees at both AIG and Citi.

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