Sarkozy tightens bank bonus rules

[FarCenter]

By Peggy Hollinger in Paris

Published: August 25 2009 20:55 | Last updated: August 25 2009 20:55 http://www.ft.com/cms/s/0/912504b6-91ae-11de-879d-00144feabdc0.html

Banks will be barred from lucrative French government mandates if they fail to abide by new international guidelines on pay, President Nicolas Sarkozy warned on Tuesday as he unveiled tough domestic rules on rewards for traders.

“We will not work with banks that do not apply the rules,” the French president said after a meeting with the country’s top bankers, who were summoned to the presidential Elysée Palace. The executives included Baudoin Prot of BNP Paribas, Frederic Oudéa of Société Générale, and Georges Pauget of Crédit Agricole.

Mr Sarkozy unveiled a series of measures aimed at tightening French rules on banking pay and improving the disclosure of bonus payments.

These include deferring traders’ bonuses over three years, paying one-third of awards in shares, and imposing strict long-term performance criteria in order to receive full payment. The government has also appointed bonus watchdogs at banks that have received state aid.

Top French banks including BNP Paribas, Société Générale and Crédit Agricole have signed up to the new rules.

The measures take recommendations on traders’ pay made at the G20 summit last spring a step further. Under those guidelines, guaranteed bonuses are to be banned, payment deferred over several years and the cost of risk must be included in remuneration policy.
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[yourout]

1. Hm......seems to be sensible to me.

I have no doubt we will never see it here though.