The eight highest-paid executives outside boardroom level of Britain's biggest banks would have to reveal their pay packets under new proposals revealed by the Treasury today.
The Government has launched a consultation on the proposal as it looks to tackle "unacceptable" bank bonuses by improving pay transparency at the country's largest banks.
Mark Hoban, financial secretary to the Treasury, said the move would give shareholders more power to "hold banks to account" over their bonus structures.
The announcement comes after influential shareholder group the Association of British Insurers (ABI) warned banks it can no longer be "business as usual" for the banking sector when they decide how much to pay their staff.
Meanwhile, Chancellor George Osborne echoed comments made by Bank of England governor Sir Mervyn King and urged banks to store cash this winter rather than pay staff bonuses.
In a statement, the Treasury said improving transparency for senior executives who manage risk will help provide shareholders with more tools to hold senior management to account.
The proposals would aim to improve transparency at an estimated 15 banks, including the largest UK institutions and the UK operations of large foreignbanks.
The consultation, which ends on February 14, follows the introduction of the bank levy, the Project Merlin lending agreement and the Government-appointed Independent Commission on Banking, which has called for a raft of changes within the industry.
Mr Hoban said: "The banking system cannot reward employees for short-term performance while leaving investors exposed to long-term risk. We want shareholders to hold banks to account for their bonus structure, which is why we're taking action to make top-level pay more transparent."
Trade association ABI has written to all UK-listed banks, including Lloyds Banking Group, Barclays, Royal Bank of Scotland and HSBC, to call for an overhaul of the way the companies determine pay packets.
Plunging share prices have hit investments while the payment protection insurance (PPI) scandal and eurozone debt crisis have dented bank profits and as a result the ABI said it expects to see lower bonus pools and individual awards.
Otto Thoresen, ABI's director general, said: "It is essential that all banks take, and are seen to take, a responsible approach."
The mounting pressure comes ahead of February's banking results season when bankers' bonuses will be revealed and are expected to provoke further outrage, despite being lower than previous years.
Campaigners, MPs and shareholder groups have called for a crackdown on City pay since the 2008 credit crunch forced taxpayers to bail out RBS, Lloyds, Northern Rock and Bradford & Bingley.
Sir Mervyn called on banks to limit pay and dividends to maintain sufficiently high levels of capital to protect from potential future financial shocks, such as the collapse of the euro or a UK credit downgrade.
The Chancellor, addressing members of the Treasury Select Committee, echoed the governor's sentiments and said it was "absolutely right to say tobanks they should be using any earnings they have to strengthen their balance sheets if necessary, rather than distribute those earnings in larger bonuses".
But in his letter, Mr Thoresen said members were concerned about the levels of returns shareholders receive compared with employees.
"Members believe that in recent years this balance has been inequitable, with too much value being delivered to employees in contrast to the dividends paid to shareholders," he said.
Mr Thoresen said the need to maintain a suitable level of capital should not be solely funded by a cut to dividends.
The ABI is a financial services trade association representing the general insurance, investment and long-term savings industry. It has more than 300 members and accounts for 90% of premiums in the UK.
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