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Text size [+][-]  Saturday November 21 2009GLOBAL EDITION

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03 Sep 2009 15:40

Bonus misfire



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Gordon Brown, Nicolas Sarkozy and Angela Merkel have agreed a common line on bankers’ bonuses in the run-up to the G20 summit in Pittsburgh later this month. The three leaders outlined their approach in a joint letter to Fredrik Reinfeldt, the Swedish prime minister who is president of the European Union.

Among their proposals is a suggestion that: “We should explore ways to limit total variable remuneration in a bank either to a certain proportion of total compensation or the bank’s revenues and/or profits”.

 

 

Brown, Sarkozy and Merkel have finally agreed a common line on bankers’ bonuses. But the new element – a possible cap on total bonus pools – is likely to have perverse consequences. There’s a better way of addressing voter outrage at the return of mega-pay.

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