G-20 Working on Proposals to Control Bankers’ Bonus Pay

Sept. 5 (Bloomberg) -- Finance Ministers from the Group of 20 agreed to deliver a plan to control bankers’ bonuses, seeking to appease public anger over what they call excessive pay, according to an official from a Group of Seven nation.

The plan would permit the “clawback” of bonuses, would link bonuses to base compensation and require banks to disclose the pay of their top earners. It wouldn’t include a cap on bonus payments, the official said.

Ministers, meeting in London today, agreed that a final package will be unveiled at a summit in Pittsburgh this month, the official said. The Financial Stability Board, a Basel-based of panel international regulators, will report back in time for the summit on way of implementing the measures.

U.K. Chancellor of the Exchequer Alistair Darling clashed with French and German counterparts yesterday on whether to cap compensation for bankers, saying such proposals would be unworkable.

French Finance Minister Christine Lagarde and Germany’s Peer Steinbrueck, are trying to steer the G-20 toward reining in pay at banks after taxpayer-funded bailouts of the industry. Goldman Sachs Group Inc. set aside a record $11.4 billion for compensation and benefits in the first half of 2009, up 33 percent from a year earlier, while Morgan Stanley allotted 72 percent of its second-quarter revenue to cover pay.