Poorly-performing senior bank employees face bonuses being clawed back up to seven years after they were awarded, under plans unveiled by the Bank of England today.
The rules, which come into force on 1 January 2015, expands the existing regime, under which banks defer bonuses for three to five years.
They come as the Financial Conduct Authority is consulting on ways to recover remuneration from senior management if conduct failings come to light at a later date - even if it has already been paid out.
The PRA rules released today mean banks will be required to defer payment of bonuses for a minimum of five or seven years, depending on the seniority of the recipient.
The proposals also attempt to close a loophole where employees can sometimes avoid losing their bonus by changing firms.
FCA chief executive Martin Wheatley said: “How a firm conducts its business and treats its customers must be at the heart of how it operates. This has to start at the top.
“Today’s consultations mark a fundamental change in the regulators’ ability to hold individuals to account, which is what the public expects of us. It will also build on the cultural change we are beginning to see in the boardrooms of firms across the country.”
