Association argues high pay has hit investors
The Association of British Insurers (ABI) has written to banks demanding cuts in investment banker bonuses.
The association added that banks should not increase basic pay to compensate for the bonus reductions.
The letter was sent to all UK-listed banks yesterday. The ABI is speaking out because many of its member insurers are investors in banks’ stocks and bonds, and it feels banks are paying high bonuses at the expense of shareholder returns.
The ABI argued that now is the right time for cuts because, as so few banks are hiring, executives are unlikely to jump ship to rivals if they are disappointed with their lower bonuses.
“Our members are concerned about the level of returns that shareholders receive compared to the returns given to employees,” the letter said. “Members believe that in recent years this balance has been inequitable, with too much value being delivered to employees in contrast to the dividends paid to shareholders.”
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