Cash is king.
The New York Times reports that soon after the financial crisis, international regulators identified Wall Street’s lush pay packages as one of the culprits and proposed an overhaul that was meant to apply equally to employees of American investment banks and their big European rivals.
Four years on, the Europeans might be forgiven for wondering what happened to the American effort.
A central theme of the overhaul was to make bankers wait for a significant portion of their pay, so they would have less of an incentive to take the sort of short-term risks that led in 2008 to crippling losses.
Today, however, European firms appear to be holding back, or deferring, substantially more of their top risk-takers’ pay than American banks.
European banks like Barclays and Credit Suisse are deferring as much as 70% of the compensation granted to top employees, according to an analysis by The New York Times of the banks’ annual reports. American firms, by contrast, generally appear to be deferring about half.
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