The Chancellor announced that, in addition to introducing a bank levy, the Government will be taking action to ‘tackle unacceptable bank bonuses’. The Government will consult on a remuneration disclosure scheme and, working with international partners, will explore the costs and benefits of a ‘financial activities tax’ on profits and remuneration. The Government has also asked the Financial Services Authority as part of its forthcoming review of its Remuneration Code:

• To consider imposing more stringent requirements on the deferral and award of variable pay
• To examine mechanisms for strengthening the link between performance and remuneration to ensure that incentives are aligned with the long term performance of the firm
• To consider how to vary capital requirements to offset risk in remuneration practices

Our view
This announcement was not surprising given the apparent unwillingness of the banks to curb or change their remuneration practices.

For more information on these issues please contact

Victoria Goode or Sara Cohen

or your usual Lewis Silkin contact