Barclays outsmarts the EU
Posted on 26 November 2013 by
It didn’t take Barclays long to find a way to provide its senior staff with the total remuneration it wishes to pay them rather than the amount the EU wishes them to receive.
To get round the EU’s “bonus cap” Barclays is going to increase monthly pay by adding a payment it is calling “Role Based Pay.” I always assumed most people’s salary was based on their role but perhaps it works differently at Barclays.
According to the Evening Standard “sources close to the bank [and we all know what that means] said it was not an attempt to evade the cap because role based pay is not performance linked or retrospective.”
However, Barclays should not be defensive about this. Whatever one thinks of bankers’ remuneration the UK Government is challenging the cap, which comes into force next year, but the ruling on this challenge is not expected until after its implementation.
It was always rather naive of the Eurocrats to think they could outsmart the much better brains employed by our major banks. Furthermore, a no doubt unintended consequence, as far as the EU is concerned, will be to increase the maximum mortgage available to the Barclays’ employees affected by this change.
When assessing the maximum mortgage available lenders generally take 100% of regular monthly payments into account, but only a proportion of any annual bonus. Therefore any switch of part of the annual bonus to regular monthly pay, assuming the same total remuneration, will result in the ability to borrow more!
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