Plans to publish top executive pay

City of LondonThe eight highest-paid executives outside boardroom level of Britain's biggest banks would have to reveal their pay packets under new proposals revealed by the Treasury.

The Government has launched a consultation on the proposal as it looks to tackle "unacceptable" bank bonuses by improving pay transparency at the country's largest banks.
Mark Hoban, financial secretary to the Treasury, said the move would give shareholders more power to "hold banks to account" over their bonus structures.

The announcement comes after influential shareholder group the Association of British Insurers (ABI) warned banks it can no longer be "business as usual" for the banking sector when they decide how much to pay their staff.

Meanwhile, Chancellor George Osborne echoed comments made by Bank of England governor Sir Mervyn King and urged banks to store cash this winter rather than pay staff bonuses.

In a statement, the Treasury said improving transparency for senior executives who manage risk will help provide shareholders with more tools to hold senior management to account. The proposals would aim to improve transparency at an estimated 15 banks, including the largest UK institutions and the UK operations of large foreign banks.

The consultation, which ends on February 14, follows the introduction of the bank levy, the Project Merlin lending agreement and the Government-appointed Independent Commission on Banking, which has called for a raft of changes within the industry.

Trade association ABI has written to all UK-listed banks, including Lloyds Banking Group, Barclays, Royal Bank of Scotland and HSBC, to call for an overhaul of the way the companies determine pay packets.

Plunging share prices have hit investments while the payment protection insurance (PPI) scandal and eurozone debt crisis have dented bank profits and as a result the ABI said it expects to see lower bonus pools and individual awards.

Otto Thoresen, ABI's director general, said: "It is essential that all banks take, and are seen to take, a responsible approach."
© 2011 Press Association
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