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  3. Banks are embarking on a radical overhaul(改革)of the way they pay their senio

Banks are embarking on a radical overhaul(改革)of the way they pay their senio

游客2023-06-30  18
问题     Banks are embarking on a radical overhaul(改革)of the way they pay their senior executives by considering how they can link their bonuses to the way they treat customers and build up capital.
    The move is a major departure from the traditional way of paying out bonuses, which has been done on the basis of how the bank’s share price has performed relative to rivals, and the institution’s profitability.
    All the major banks—Lloyds Banking Group, Royal Bank of Scotland, HSBC and Barclays—are understood to be in discussions with major City investors about the performance criteria for 2011 . Senior shareholders say banks have raised the possibility of including customer satisfaction as a measure of the risks being taken, as well as the amount of capital that banks hold.
    The changes are being demanded by the Financial Services Authority, which wants to see a clearer link between pay and performance and the risks being taken by the banks. The FSA, in adopting European-wide rules that came into effect yesterday, has required that long-term incentive plans(奖金计划)should not just have profit-based targets, such as earnings per share, or relative share price performance targets, such as total shareholder return.
    The FSA’s code states: "Many common measures of performance for long-term incentive plans, such as earnings per share(EPS), are not adjusted for longer-term risk factors. Total shareholder return(TSR), another common measure, includes... dividend distributions, which can also be based on unadjusted earnings data. If incentive plans mature within a two- to four-year period and are based on EPS or TSR , strategies can be devised to boost EPS or TSR during the life of the plan, to the detriment of the true longer-term health of a firm.
    Establishing what alternatives to use is proving tricky for banks, which are trying to gauge what will be deemed acceptable both to the regulator and to shareholders who would be expected to vote on the directors’ remuneration(董事酬劳)reports at annual meetings later this year. Jon Terry, remuneration partner at PricewaterhouseCoopers, said: "This is quite radical for directors of banks. When we get to this year’s annual meetings we are going to see different rewards put to shareholders. ’ Companies in many industries, not just banks, have typically used earnings and shareholder return as the performance criteria lor bonuses.
    But since the banking crisis the use of such measures has been questioned. RBS chief executive Stephen Hester has targets linked to lending to small businesses, for instance, while, similar targets are expected to be included in the pay of new Lloyds chief executive: Antonio Horta-Osorio, who takes over in March.
    Bailed-out Lloyds and RBS said their pay plans would conform with FSA rules, while Barclays has also acknowledged that changes need to be made. [br] Which of the following is a basis of the bank’s new way of bonuses payment?
选项 A、The performance of banks’ share price.
B、The capital profitability of the banks.
C、The rival banks’ methods and effects.
D、The executives’ treatment of customers.
答案 D
解析
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