Bankers' bonuses will be subject to new limits from next year, EU members agreed last night, although the rules do not limit the size of bonuses that can be paid.
Under a deal agreed with the European Parliament, bankers will receive no more than 30% of their bonus immediately and in cash, or 20% for larger bonuses.
The remaining bonus payments will be delayed and linked to long-term performance, with 50% paid in shares.
Additionally, large severance packages for departing executives will also be limited.
However, the rules do not limit the size of bonuses that can be paid to bankers, only the proportions that must be paid in cash and shares, and the timing of those payments.
That reflects the agreement reached by the G20 countries last year, which fell short of imposing caps on the amounts bankers could be paid in bonuses.
According to the BBC, hedge funds will also be covered by the new rules, placing the pay of managers in the City of London under regulation for the first time.
The limits will apply to all 27 EU member states, although similar rules are already in place in countries including the UK.
The EU's plans are the latest sign of a tightening of global regulation of the financial industry since the economic crisis that began in the autumn of 2008.
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