Commenting on the remuneration aspects of the Bank of England and Financial Conduct Authority responses to the report of the Parliamentary Commission on Banking Standards, Tom Gosling, head of PwC’s reward practice, said:
"The good news for banks is that new legislation is unlikely to be required to implement the Commission's recommendations. However, the further revision to the Remuneration Code will be viewed with trepidation and extends the period of uncertainty created by the introduction of the EU bonus cap.
"While the Bank of England is considering all aspects of the Commission's recommendations, there are some clear front runners. The Bank of England's proposal to use its powers to recover bonuses that have already been paid to executives who are subsequently subject to successful enforcement action is significant. While this will doubtless be a popular measure, it will also give rise to significant legal issues and leave executives open to the prospect of claw-back action long after they have left the bank. This would arguably reinforce the view of the UK as having the toughest regulatory regime globally.”
