The Prudential Regulation Authority published a consultation paper today in which it set out proposals for a new rule, to be included in the Remuneration Part of the PRA Rulebook, covering the practice whereby firms recruiting new employees "buy-out" deferred bonus awards that were cancelled by the employees' previous employer. The new rule will apply (subject to certain proportionality exceptions) to all material risk takers at PRA-regulated banks, building societies and designated investment firms. It is based on a model requiring a contract between the employee and new employer, providing for the possibiltiy of malus and clawback to be applied to bought-out awards, based on a determination by the old employer.
A copy of the consultation paper is available here (pdf).
Wednesday, 13 January 2016
UK: PRA proposes new rule on buy-outs of variable remuneration by new employers
The Prudential Regulation Authority published a consultation paper today in which it set out proposals for a new rule, to be included in the Remuneration Part of the PRA Rulebook, covering the practice whereby firms recruiting new employees "buy-out" deferred bonus awards that were cancelled by the employees' previous employer. The new rule will apply (subject to certain proportionality exceptions) to all material risk takers at PRA-regulated banks, building societies and designated investment firms. It is based on a model requiring a contract between the employee and new employer, providing for the possibiltiy of malus and clawback to be applied to bought-out awards, based on a determination by the old employer.
A copy of the consultation paper is available here (pdf).
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