Parliament’s Draft Financial Services Bill Joint Committee has issued its First Report recommending that the new PRA and FCA should take an active interest in staff remuneration and should rigorously enforce the Remuneration Code.
The Committee also recommends that the Government and the Regulators should consider increasing the share of executive remuneration that is deferred and conditional on medium term outcomes, or introduce a concept of ‘strict liability’ of executives and Board members for the adverse consequences of poor decisions, in order to ensure that bank executives and Boards strike a different balance between risk and return.