Banker bonuses must be blind to gender, says EU regulator

by Reuters
Thursday, 29 October 2020 17:46 GMT

A woman, wearing a protective mask walks past the skyline with its financial district during sunset as the spread of the coronavirus disease (COVID-19) continues in Frankfurt, Germany, October 26, 2020, REUTERS/Kai Pfaffenbach

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The banking watchdog unveiled planned new guidance saying banks should not pay women less than men for equal work

By Huw Jones

LONDON, Oct 29 (Reuters) - Banks must not discriminate between men and women in awarding bonuses for the same activity, the European Union's banking watchdog proposed on Thursday.

"Remuneration policies must be gender neutral and respect the principle of equal pay for male and female workers for equal work or work of equal value," the European Banking Authority (EBA) said in proposed revisions to its 5-year old guidelines on sound remuneration policies.

The EBA said that senior management representation and diversity within the management bodies and shortcomings regarding equal opportunities for staff of different gender still exist.

"The EBA will follow up on institutions' practices with a report to be published within two years after the publication of the final guidelines," the watchdog said in a statement.

The guidelines were first introduced to cap banker bonuses in response to public anger over lenders being bailed out in the financial crisis a decade ago.

The EBA said it was also clarifying severance pay, retention bonuses and discretionary pension benefits to avoid such payments being used to circumvent the cap on bonuses.

It is also introducing more flexibility for smaller banks with assets of up to 15 billion euros or bankers that only receive a modest bonus, to be exempt from parts of the guidelines.

Bankers must receive a portion of their bonus in shares that "vest" over time, but small banks are often unlisted, thereby creating an administrative headache.

The EBA has put out the proposed revisions to public consultation, with final changes published in the first half of 2021. (Reporting by Huw Jones; Editing by Kirsten Donovan)

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