If this policy is anything to go by, then it means no more holiday outings every week to the nearest beach house, no more wine and cake parties, and to say the least no more “extra” rewards for anything.
But this policy is good. In a phase when the government seems to be tumbling down and again to pick up all its scattered pieces the least the citizen can do, is compromise on their benefits, their lifestyles, to help the government reach a position of stability and sustainability. The FSA or the Finance Service Authority has come up with a plan to save the UK from going in to deep recession, by making bonuses which are usually larger than the base salaries themselves, a part of the glorious past.
According to the new plan drafted, financial companies can reward their employees only on the basis of their long term performance with the company and not according to the profit attained in the ongoing financial year. The draft believes that during thin times, salaries should be motivation enough for people to work, and the extra bonus policy should be eliminated till the government gets back in shape.
One of the other things it spoke about is bonus pools, which would largely be based on profit not on revenue, and should concentrate in excluding big bonuses completely out of the frame. This is also a recommended framework by the regulatory body which they want the financial institutions of the country to follow.
The FSA started working on this plan last October and the principle that they set out with, was to connect a parallel between remuneration policies and risk management.
In a policy decision of this nature and intensity, lot of financial figures including Sir Fred of RBS has been criticized. It’s a matter of time and hope and we might just see UK getting back to its older, more glorious days, soon.
