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Written question asked by Dai Davies (Independent (affiliation)) on Tuesday, 10 February 2009, in the House of Commons. It was due for an answer on Thursday, 12 February 2009. It was answered by Ian Pearson (Labour) on Tuesday, 21 April 2009 on behalf of the Treasury.

Banks: Pay

Question
To ask the Chancellor of the Exchequer what criteria have been set by each bank in receipt of public money for qualification for senior staff bonuses; whether the Financial Services Authority plays a role in the ratification of such criteria; and whether his Department has provided any guidance to the remuneration committees of such banks on bonus payments.
Answer

The Government set strict conditions for executive bonuses at the banks that participated in the recapitalisation scheme in October 2008. The Royal Bank of Scotland and Lloyds Banking Group have also both announced their intention to participate in the asset protection scheme and therefore, in addition to the requirements on remuneration imposed as part of the recapitalisation last October, both banks have committed to implement a policy consistent with the FSA's code of practice on remuneration policies. The FSA is currently consulting on its code and published its consultation paper on 18 March.UK Financial Investments Ltd. (UKFI), which is wholly owned by the Government and operates on a commercial and arms length basis, oversees the remuneration conditions attached to subscribing to the Government's recapitalisation fund and the Treasury's asset protection scheme. UKFI has worked to ensure that the banks subscribing to these schemes offer incentivisation based on the Government's principles on remuneration, including no rewards for failure, and to protect the interest of the taxpayer as a shareholder.In line with these principles, the Royal Bank of Scotland (RBS) has announced that there will be no bonuses or pay increases made to staff associated with the major losses suffered in 2008 and that board executive directors will receive no bonus for 2008 performance and no pay increase in 2009. No discretionary cash bonuses will be paid in 2009 for performance in 2008, and only legally binding guaranteed bonuses will be paid. Lloyds Banking Group has committed to restructuring remuneration based on these same principles.

Secondary information

Type
Written question
Reference
491 c636W; 256985
Session
2008-09
Subjects
Banks Pay
Link
View this Written question on www.publications.parliament.uk