LONDON (Reuters) - Top bankers’ bonuses should be capped at the size of their salaries and shareholder approval be required for longer-term incentive plans, German Finance Minister Wolfgang Schaeuble said on Friday.
“We need to set incentives for managers to act in the long-term interest of their banks,” Schaeuble said in an opinion piece in the Financial Times.
The argument over capping bankers’ pay is threatening EU efforts to implement the global bank rules known as “Basel III” by the January 2013 deadline.
“Immediate cash bonuses for top bank executives should not exceed their fixed pay. And why not give a large quorum of shareholders the last say on setting these executives’ long-term variable pay as soon as it exceeds a given level?” Schaeuble said.
After “Basel III” is implemented, it is hoped lenders will be able to withstand market shocks better and not need taxpayers to bail them out.
Reporting by Stephen Mangan