Bankers would receive a quarter of their bonuses in immediate monetary payouts under rules proposed by European Union regulators, which would allow as much as half of overall awards to be paid in cash rather than shares.
Bonuses may be evenly split between cash and shares, the Committee of European Banking Supervisors said in an emailed statement today.
At least half of each segment of the bonus must be deferred for as much as three years, said CEBS, which chaired a meeting of supervisors from the 27 EU member states in London.
The EU is implementing rules on bonuses as part of a range of measures to rein in the risk taking blamed for causing the current financial crisis.
Some national regulators, including the UK Financial Services Authority, had sought to interpret EU rules in a way that would allow cash bonuses of as much as half the overall award.
“We must not move away from clear commitments made,” in laws agreed to by the European Parliament and member states earlier this year, Chantal Hughes, spokeswoman for the European Commission, said in an emailed statement.
As much as 60pc of bonuses may have to be deferred “depending on the impact the staff member can have on the risk profile of the institution,” CEBS said in today’s report. Banks were given until November 8 to respond to the plan.
Workers at subsidiaries of European banks outside of the region will also be subject to the bonus rules.
Staff “will not be able to bypass the remuneration requirements by becoming employees of an offshore or non-regulated entity of the group while still performing services and duties for EU-based institutions,” CEBS said.
Without an agreement on bonuses at a global level “the result will be significant difficulties for businesses in Europe and for the many hundreds of thousands of jobs that depend on the financial services industry,” Angela Knight, chief executive of the British Bankers’ Association, said in an e-mailed statement.
“We need to look across the Atlantic to the US, and east towards Asia, to ensure changes are imposed sensibly everywhere,” Knight said.