The UK Treasury is proposing new measures to improve executive compensation transparency at its big banks.
The UK government launched a consultation Tuesday on proposed measures to improve transparency that would require the eight highest-paid executives with responsibility for managing financial risk to disclose their remuneration arrangements.
Under the proposals, banks will not be required to publish the name or title of the recipient, but the disclosure must include the pay of each individual, split up into fixed, variable, deferred variable, long term incentive scheme vestings, pension accruals, joining and severance benefits. The first disclosures will be due in 2012, covering the 2011 year.
The proposals would apply to banks with assets in excess of £50 billion. Currently, that would cover about 15 banks, including the largest UK banks and the UK banking operations of large foreign banks.
“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. We want the most transparency for those with the greatest responsibility,” said Mark Hoban, financial secretary to the Treasury.