Responding to the PRA/FCA announcement on remuneration and clawbacks, BBA Executive Director Simon Hills said:
“Banks want compensation that rewards long-term performance, discourages excessive risk-taking and appropriately aligns risk with reward.
“It is right and proper that designated senior managers should be subject to a further 3-year clawback period where there are outstanding internal or regulatory investigations at the end of their normal seven-year deferral period.
“We also think it’s right that the PRA has recognised that more junior material risk-takers do not need to be subject to a five-year deferral, but that they should instead be subject to between three and five years. This is in line with the principles already set out in the Capital Requirements Directive.
