Measuring the effects of bank remuneration rules: evidence from the UK

Ieva Sakalauskaite (ieva.sakalauskaite@bankofengland.co.uk) and Qun Harris (qun.harris@bankofengland.co.uk)
Additional contact information
Ieva Sakalauskaite: Bank of England, Postal: Bank of England, Threadneedle Street, London, EC2R 8AH
Qun Harris: Bank of England, Postal: Bank of England, Threadneedle Street, London, EC2R 8AH

No 1008, Bank of England working papers from Bank of England

Abstract: In this paper, we study whether and how some of the remuneration rules introduced after the Global Financial Crisis affected bankers’ compensation using a unique regulatory dataset on remuneration in six major UK banks during 2014–19. We find that for bankers most affected by limits on their bonus to fixed pay ratios (the bonus cap), total pay growth did not decrease, but compensation shifted from bonuses to fixed remuneration. We also find some evidence which could indicate that requiring bankers’ bonuses to be deferred for longer periods was correlated with increases in total compensation and a lower proportion of bonuses being deferred.

Keywords: Remuneration regulation; bonus cap; deferral; bank regulation (search for similar items in EconPapers)
JEL-codes: G21 G28 G38 J33 L51 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2022-12-19
New Economics Papers: this item is included in nep-ban, nep-hrm, nep-lma, nep-mon and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:boe:boeewp:1008

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