Further relaxation of UK bankers' remuneration rules: deferral periods for bonuses to be shortened and other changes
On 17 October 2024, Sam Woods, CEO of the Prudential Regulation Authority ("PRA") proposed shortening the deferral periods that currently apply to risk-takers' variable remuneration in large banks, along with other changes to the remuneration rules.
The PRA, together with the Financial Conduct Authority ("FCA"), has now published a consultation paper setting out the proposed changes in more detail. This alert considers those proposals and their implications for banks and relevant employees.
Although it will only be pay for 2026 calendar year onwards that is able to benefit from these proposals and the changes may only affect a small number of individuals in the scale of things, banks should start considering next year what changes they may make in response to these generally very welcome proposals.
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