In Europe, bankers’ bonuses are limited to or one or two times their salaries—but London banks are flouting that rule, reports the New York Times.
Banks like Goldman Sachs, Bank of America and Barclays are restructuring how they pay their workers to get around the new law.
Instead of calling the pay a bonus, banks now issue what they call role-based pay, allowances, or reviewable salary, says the Times. While some in the European Parliament don’t think the name-change would stand up to the court challenge, in the mean time banks are undermining the spirit of the law—which was to stagger bonus pay over several years.
The point is to enable banks to claw the money back should the actions of a trader prove reckless.
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