Investment banking giant Goldman Sachs today announced that senior executives would not receive cash bonuses for this year.
Goldman said the discretionary bonuses for the firm's 30-strong management committee would be paid entirely in shares subject to restrictions for five years, meaning they could not be sold for that period.
The firm said the move would strengthen its ability to claw back funds "in cases where the employee engaged in materially improper risk analysis or failed sufficiently to raise concerns about risks".
Goldman is expected to pay bumper bonuses this year after seeing a sharp rise in profits.
The US banking firm said in October that it had earmarked 16.7 billion US dollars (£10.3 billion) for the first nine months of 2009 to cover compensation and benefits for its 31,700 staff globally - up 46 per cent on a year ago.
Goldman, which employs about 5,500 people in London, received a 10 billion US dollars (£6.16 billion) government handout at the height of the credit crisis.
While it repaid the money soon after, Goldman has been criticised for giving employees big payouts despite the weak economy.
Today's announcement comes after Chancellor Alistair Darling yesterday slapped a 50 per cent super-tax on UK bank bonuses above £25,000 until April next year.
Goldman said its measures today reflected its compensation principles.
Chairman and chief executive Lloyd Blankfein said: "We believe our compensation policies are the strongest in our industry and ensure that compensation accurately reflects the firm's performance and incentivises behaviour that is in the public's and our shareholders' best interests."
Investors will be able to vote on the policy at the bank's annual meeting next year.Reuse content