Walker review proposes shake-up of banks' pay practices
Greater emphasis on long-term incentives for executives, a company-wide remit for remuneration committees and disclosure of the pay of executives below board level are among the recommendations of a Treasury-commissioned review of corporate governance and risk management in the finance sector1.
The consultative document published by the Walker review, which was set up in February 2009 in response to the banking crisis, argues that: "If banks are to be able to contribute to the nation's economic recovery and wellbeing, it is of crucial importance that remuneration practices be reconstructed to provide incentives in support of sustainable performance."
The review recommends that remuneration committees - which have traditionally been involved in setting and monitoring board pay only - should have an extended remit where necessary to cover all aspects of remuneration policy on a firm-wide basis.
