Legislators' fury with fat bonuses leads to rise in basic compensation
With President Obama leading the charge against sky high bonuses by regulating the compensation packages in the US Banks, there is a definite shift in organisations the world over in their outlook on the remuneration of its senior most staff. The amendment proposed by Mr Obama looks at restricting the bonus element of the highest earners to less than a third of their total compensation. The same trend is being seen in the UK with the Financial Services Authority arguing that “fixed pay should be a sufficiently high proportion of total remuneration to allow for a flexible bonus scheme”. Jumping on the bandwagon Morgan Stanley today announced a thirty percent increase in the base salaries of its co-presidents to $800,000 and those of its chief financial, legal and administrative officers would now be $750,000. While Morgan Stanley’s move is likely to trickle down to the salaries of its managing directors, it is not alone in taking this step. UBS has also signalled to its bankers that their base salaries are going up.