EU Reaches Deal to Curb Bank Bonuses
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The European Union moved to slap a strict limit on bank executives' bonuses in the latest effort to curb what is seen by many as corporate and banking excess.
Negotiators for the European Parliament and EU states said they reached a preliminary deal on a measure that would forbid bonuses that exceed a bankers' fixed salary. Flexible pay could increase to twice fixed salary, but only with explicit shareholder approval.
The initiative, part of a broader law that forces lenders to build up more-robust financial cushions, is designed to reduce incentives for the type of risky behavior widely blamed for contributing to the 2008 financial crisis.
The EU push comes as Swiss voters will indicate on Sunday just how deep their resentment of big executive paychecks runs when they vote on a controversial plan that would give shareholders sweeping authority over executive compensation.
The 24 items contained in the Swiss referendum, dubbed the "rip-off" initiative, would allow shareholders to block salaries, ban so-called golden handshakes and parachutes—forms of guaranteed parting packages—and require greater transparency on loans and pensions to executives and directors. The measure includes fines and prison sentences for violations.
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