No.10 takes a stand on bankers' bonuses

Although he refused to endorse the comments already made by Lord Turner, UK Prime Minister Gordon Brown has taken the debate over reform within the global financial sector to a new level with his statement that pay and bonuses should be based on long-term success not short-term speculative gains. In an interview with the Financial Times, he also stated that banks should “claw back” bankers’ rewards if their performance suffered in subsequent years. Mr Brown said he hoped that the G20 leaders meeting in Pittsburgh this month would provide a forum for further global debate on the issue, and made it clear that although he supported attempts to tackle the high pay of bankers, this was not an action that the UK could take unilaterally. The debate has already started to be addressed within other European countries, where leaders have also called for steps to be taken to prevent excessive risk-taking by large banks. In Berlin on Monday, Germany's Chancellor, Angela Merkel commented that “No bank should be allowed to become so big that it can blackmail governments.”

Financial Times: Brown pledges bonus clampdown

• Is some form of reform over the pay of senior managers within the financial sctor now inevitable?
• Why is taking a stand on this not an issue that the UK would wish to take independently?
• What are the risks of reform being introduced in Europe, but not in the other economies of the developed world?
• What preparations might the HR Directors of financial institutions be making in advance of such reform being introduced?
• Gordon Brown has stated that "pay and bonuses should be based on long-term success not short-term speculative gains." What might a remuneration package that rewards such factors look like?