Banking: Directors and Executives

House of Lords written question – answered on 22nd October 2008.

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Photo of Lord Dykes Lord Dykes Spokesperson in the Lords (Europe), Foreign & Commonwealth Affairs, Spokesperson in the Lords (Cap Reform), Environment, Food & Rural Affairs

asked Her Majesty's Government:

What steps they will take to ensure that public money used to rescue financial institutions is not spent on excessive remuneration packages to the directors and senior executives of such companies.

Photo of Lord Myners Lord Myners Parliamentary Secretary, HM Treasury

As part of their investment, the Government have agreed a range of commitments with banks accessing the capitalisation scheme. The Government expect that no cash bonuses will be paid to directors in the current year. Going forward, and to ensure that taxpayers' interests as shareholders in the bank are protected, and the performance of the company enhanced, directors' remuneration will be linked to long-term value creation and take account of risk.

The terms have been agreed on a case-by-case basis with banks accessing the recapitalisation scheme, although elements are common to all participating banks.

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