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Banks get round pay rulings
12.08.09
Banks are already changing their pay policies to get round tighter bonus rules with several reports that in some cases basic salaries are being doubled.
High-flying bankers have traditionally received relatively low basic pay of some £150,000 a year but regularly received bonuses running into seven figures.
Under the current environment of intense scrutiny from politicians and regulators banks are proving themselves adept at deflecting the glare of publicity by using more innovative payment methods.
“It has been acknowledged that a move away from a bonus culture would need to lead to higher salaries, but what may not have been anticipated is the anecdotal doubling of salaries in some areas, in effect giving a guaranteed bonus,” Nick Stretch, lawyer with CMS Cameron McKenna, told Bloomberg News.
In the US, where there are heavy restrictions on bonus payouts by banks which had taken taxpayers' bailout funds, base salaries have started rising sharply. Citigroup is increasing basic salaries pretty much across the board by 50%.
