Standard Chartered CEO Slams EU Bonus Cap as "Grotesque Incentive"
Standard Chartered CEO Bill Winters has criticized the EU's former bonus cap as creating a "wrong incentive" for bank managers. The cap, introduced in 2014 to limit risk-taking, resulted in excessive increases in fixed pay.
Winters argues that the cap discouraged hard work and incentivized managers to focus on "clipping coupons" rather than performing effectively. Since the UK abolished the cap, several banks, including Standard Chartered, have lifted limits on bonuses for top bankers.
Standard Chartered has proposed a pay shake-up that will benefit Winters. His salary will decrease from £2.5m to £1.5m, but his bonus and share payments will increase, with a maximum potential pay of £13.1m.
The bank's full-year pre-tax profits rose by 18% to $6bn, with operating income increasing by 8% to $19.7bn. The record turnover was driven by a 29% growth in wealth management income.
Executive pay at Standard Chartered has been subject to criticism in the past, but Winters maintains that the new plan aligns with shareholder interests.
The UK initially agreed to the bonus cap in 2014 due to concerns over "casino banking." Regulators have since proposed relaxing the regime, including shortening the deferral period for senior banker bonuses.