The Bank of England's Prudential Regulation Authority (PRA) has said that it wants to tighten rules over bonus buy-outs, whereby banks compensate new employees for any remuneration cancelled when they change jobs. Buyouts have been used legitimately in cases such as the hiring of Jes Staley as CEO of Barclays, who received a big one-off share payment from the bank to replace part of a bonus awarded from his time at JP Morgan Chase. But there are concerns about whether this is an effective way of encouraging people to stay with their current employers. Under the new terms, clawback and malus could occur after an employee has moved to a new bank, should wrongdoing be discovered.
The Bank of England's Prudential Regulation Authority (PRA) has said that it wants to tighten rules over bonus buy-outs, whereby banks compensate new employees for any remuneration cancelled when they change jobs. Buyouts have been used legitimately in cases such as the hiring of Jes Staley as CEO of Barclays, who received a big one-off share payment from the bank to replace part of a bonus awarded from his time at JP Morgan Chase. The reason the UK authorities are focusing on these buyouts is their concern that they can be used by bankers with a patchy regulatory record to get around tough rules introduced following the financial crisis. Under the new terms, clawback and malus could occur after an employee has moved to a new bank, should wrongdoing be discovered.