PITTSBURGH (Reuters) – World leaders at the G20 meeting here yesterday were closing in on a statement calling for new restraints on banker pay, but would not endorse specific monetary caps, a deal-breaker for the United States.
High levels of compensation, which in some cases resulted in top executives of money-losing financial companies reaping tens of millions of dollars in bonuses, have outraged political leaders and are a top target of regulatory reform efforts.
Officials were focused on finding ways to link a bank’s bonus pool and executive compensation more closely to the health of its balance sheet and overall profitability.
“Europeans are horrified by banks, some reliant on taxpayers’ money, once again paying exorbitant bonuses,” said European Commission President Jose Manuel Durao Barroso in a statement preceding the official opening of the summit of the Group of 20 nations.
“In Pittsburgh, the EU will call for coordinated action to stop this, building on measures already taken in Europe and elsewhere,” he said.
Before the global financial crisis that began last year, and in some cases right through it, a glaring disconnect between pay and performance was on display at many banks, including some rescued by massive taxpayer bailouts.
