Britain's 5 biggest banks agree to curb bonuses

LONDON (AP) — Britain's five biggest banks have agreed to curb bonuses as agreed upon at the Group of 20 nations meeting in Pittsburgh and called for other financial institutions to follow suit, Treasury chief Alistair Darling said Wednesday.

HSBC(HBC), Barclays (BCS), RBS (RBS), Lloyds (LYG) and Standard Chartered pledged to link bonuses to long-term performance, Darling said. The changes will take effect in January and apply to bonuses paid out for performances in 2009.

Leaders at the G-20 meeting last week said a significant portion of bank officials' potential compensation should be delayed and tied to the performance of their investment decision. They said excessive compensation contributed to excessive risk-taking and the recent global recession.

Under the new guidelines, which will be implemented in Britain through main regulator the Financial Services Authority, bonus payments will be tied directly to performance, and will have to be repaid if performance falls. Companies will also have to publish an annual report on pay and bonuses, and give details on how bonuses and salaries are decided.

Darling said he expects other banks in Britain and abroad to also introduce changes. "It is vital that our financial services industry remains at the forefront of the industry globally and takes a responsible and long-term approach to remuneration," he said.

In a joint statement, the five banks said: "We ... welcome the G-20 remuneration reforms, and their global nature, as it is essential that banking reward is consistent with effective risk management and that there is parity both nationally and internationally on these issues."

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