September 18, 2009

EU in accord over bank bonuses

European leaders, in advance of next week's summit meeting in Pittsburgh, reached agreement over a bank pay policy that ties bonuses to long-term performance.

Europe is united on a strong political message, French President Nicolas Sarkozy said after a three-hour dinner meeting in Brussels.

The EU proposal to tie compensation to long-term performance was accepted by all 27 European Union member states, The New York Times reported Friday. It allows the EU to present a forceful case for an international accord at the Group of 20 meeting in Pittsburgh on Sept. 24-25.

Both Britain and the United States have opposed putting a ceiling on executive pay, the Times said. Nations, in general, agree that an uneven set of rules would create an industry migration with talented bankers flocking to companies where the pay policies were the most lenient.

Thursday, British Prime Minister Gordon Brown said there was no going back to the bonus structure of the past.

Brown said he agreed to extending bonus payments, if they were not owned over a long period of time.