Posted by Caroline Doran Millett, Partner
On 1 September 2016 Withy King LLP merged with Royds LLP. The trading name for the merged firm is Royds Withy King. All content produced prior to this date will remain in the name of the firms pre-merger.
Bankers seek ways round bonus clawbacks: Caroline Doran comments in the Financial Times
Caroline Doran, an employment law partner at Royds, has been quoted in a Financial Times’ article on bankers seeking ways to shield themselves from the new draconian rules on remuneration allowing bonuses to be clawed back for up to a decade for senior managers. The FT reported that lawyers have been inundated with questions by bankers about putting assets beyond their employers’ reach after the proposals were announced by the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA). The regulators’ plans will make the UK regime the toughest in the world for bankers.
FT noted that many senior bankers already use offshore trusts to protect their assets. Under the new clawback rules, such trusts may still offer protection because banks will have to factor in the cost of recovery when deciding if clawback is “proportionate”. Caroline Doran said that if complex trusts or offshore accounts are too tricky or too expensive to unpick, banks may be less likely to pursue those particular bankers. Caroline further commented that “The only people who will win out of this are the lawyers and advisers used to plan bankers’ estates. The most senior bankers, with the most sophisticated financial personal arrangements, will have little to fear from clawback threats.”
The FCA and PRA have stated that the clawback powers will apply to all bonuses for performance periods after 1 January 2016.
If you have any questions regarding bonus payments or clawback then contact Caroline Doran, Partner in the Employment Department on 0207 842 1495.
It pays to employ the right employment solicitor