Thousands more London bankers are set to be caught by the EU's controversial bonus cap, it emerged yesterday.
The European Banking Authority's board of supervisors has ruled that any employee making more than €500,000 (£420,000) annually should be deemed a "material risk taker". Experts say this means the cap, which limits bonuses to no more than 100 per cent of salary, or twice that with shareholder approval, would apply to them. Barclays, widely seen as most affected by the cap in the UK, had 393 "material risk-takers" in the current year but had 1,338 staff earning more than £500,000.
That potentially quadruples the number of its bankers facing bonus caps, which are set to come in next year. Remuneration experts at PricewaterhouseCoopers said some banks in London could see the number of bankers getting capped rise by a factor of ten.
Jon Terry, a partner at PwC, said: "This expansion of the definition of risk takers will see substantially more individuals working in the banking industry being hit by tougher pay rules, including being subject to bonus caps from next year."
He added: "This will create a major challenge for banks as to how they reward their staff. Bringing more people into the stringent pay rules again further widens the gap between pay practices in Europe and the rest of the world.
"The final rule is likely to be adopted ahead of the 2014-15 remuneration round, meaning companiesReuse content