LONDON - The days of wine and roses - and company-paid country club memberships - are fading fast for international bankers.
The move to slash their salaries, bonuses and perks extends far beyond the United States, where President Barack Obama has limited salaries to US$500,000 (S$750,000) for those whose banks accept bailout money.
In Europe, some bankers are being forced to renounce bonuses and accept salary caps, while others have volunteered to do so to quell public anger.
Salary caps have been discussed in Russia - where an oil-fuelled boom has run its course - and the Australian prime minister has called for an end to bankers’ ‘unrestrained greed.’ Howard Wheeldon, senior strategist at stockbrokers BGC Partners in London, said the impact of Obama’s crackdown will be far-reaching.
‘There will be a ripple effect right around the world,’ he said. ‘People will sit up and take notice wherever there are banks that have gotten themselves into any sort of problems.’
Mr. Obama’s decision to cap bankers’ salaries has not been universally well-received, even in countries where authorities are taking similar steps.
Laurence Parisot, head of France’s business lobby Medef, told the French business daily La Tribune that Mr. Obama’s actions might make it harder to find ‘competent’ managers to help solve the banking crisis.
An editorial in Switzerland’s respected The Neue Zuercher Zeitung newspaper said Obama had given in to emotion and ‘served populist instincts’ in his clampdown.
The newspaper called the salary caps ‘excessively draconian.’
In South Korea, Kim Bong-man, a spokesman for the Federation of Korean Industries, said governments should not impose salary decisions on companies. ‘It shakes the basis of the free market economy.’
‘Companies may voluntarily decide to carry out a wage freeze if they think it’s necessary for survival, but it’s not something government should force upon them.’ He said many South Korean executives are voluntarily cutting or returning their salaries and bonuses.
The movement to limit pay packages has not spread beyond Europe, although Australian Prime Minister Kevin Rudd has loudly criticised high salaries at financial institutions, calling for ‘responsible behaviour rather than unrestrained greed.’
In Russia, the government has held discussions about limiting executive pay and has recommended that bonuses be kept low, said Arthur Shamilov, a partner at Topcontact, an executive recruitment company.
He said the government may cap executive pay at about US$1 million within the next few months. ‘We’re going through a very tough time right now,’ he said. ‘I don’t see any moves to come from the US to Russia.’
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Days of wine, roses over
Bankers are under fire in countries besides US.
AP
6 February 2009
LONDON - The days of wine and roses - and company-paid country club memberships - are fading fast for international bankers.
The move to slash their salaries, bonuses and perks extends far beyond the United States, where President Barack Obama has limited salaries to US$500,000 (S$750,000) for those whose banks accept bailout money.
In Europe, some bankers are being forced to renounce bonuses and accept salary caps, while others have volunteered to do so to quell public anger.
Salary caps have been discussed in Russia - where an oil-fuelled boom has run its course - and the Australian prime minister has called for an end to bankers’ ‘unrestrained greed.’ Howard Wheeldon, senior strategist at stockbrokers BGC Partners in London, said the impact of Obama’s crackdown will be far-reaching.
‘There will be a ripple effect right around the world,’ he said. ‘People will sit up and take notice wherever there are banks that have gotten themselves into any sort of problems.’
Mr. Obama’s decision to cap bankers’ salaries has not been universally well-received, even in countries where authorities are taking similar steps.
Laurence Parisot, head of France’s business lobby Medef, told the French business daily La Tribune that Mr. Obama’s actions might make it harder to find ‘competent’ managers to help solve the banking crisis.
An editorial in Switzerland’s respected The Neue Zuercher Zeitung newspaper said Obama had given in to emotion and ‘served populist instincts’ in his clampdown.
The newspaper called the salary caps ‘excessively draconian.’
In South Korea, Kim Bong-man, a spokesman for the Federation of Korean Industries, said governments should not impose salary decisions on companies. ‘It shakes the basis of the free market economy.’
‘Companies may voluntarily decide to carry out a wage freeze if they think it’s necessary for survival, but it’s not something government should force upon them.’ He said many South Korean executives are voluntarily cutting or returning their salaries and bonuses.
The movement to limit pay packages has not spread beyond Europe, although Australian Prime Minister Kevin Rudd has loudly criticised high salaries at financial institutions, calling for ‘responsible behaviour rather than unrestrained greed.’
In Russia, the government has held discussions about limiting executive pay and has recommended that bonuses be kept low, said Arthur Shamilov, a partner at Topcontact, an executive recruitment company.
He said the government may cap executive pay at about US$1 million within the next few months. ‘We’re going through a very tough time right now,’ he said. ‘I don’t see any moves to come from the US to Russia.’
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