Standard Chartered boss claims banker bonus cap led to laziness
- The EU implemented a cap on bankers' bonuses in 2014 to prevent excessive risk-taking.
- The UK criticized the cap, arguing it led to increased fixed pay for bankers.
- Bill Winters argues the bonus cap made salaries grotesque and discouraged hard work.
In the financial industry, the cap on bankers' bonuses was established by the EU in 2014 as part of regulatory changes intended to mitigate excessive risk-taking following the 2007-09 financial crisis. The rule limited variable remuneration for senior financiers to a maximum of twice their fixed pay. Over time, this regulation has been a subject of contention, particularly in the UK, which has been critical of the framework from its inception. The argument against the cap stated that it forced banks to compensate top employees with larger guaranteed salaries, inadvertently leading to a decline in the incentive for strong performance. As a result of the UK government's recent decision to abandon the EU-imposed cap, banks such as Standard Chartered, HSBC, and Barclays plan to revise their executive payment structures. These adjustments come in the wake of the UK's push to encourage more competitive remuneration packages that can attract talent and improve bank performance. Standard Chartered's CEO, Bill Winters, expressed his discontent with the bonus cap, labeling the resulting fixed salary increases as