Bank of America plans to pay part of bonuses in some sort of chit that would fluctuate in value according to the company's performance.
On Wednesday, Rich Ricci, head of Barclays' investment banking unit, cashed in $26 million of deferred shares as part of bonuses that he received from 2009 to 2011.
The accord, supported by all 27 European Union nations, called for the major part of bonuses to be deferred over time, ensuring that they "could be canceled in case of a negative development in the bank's performance".
WALL STREET JOURNAL HSBC's Plan to Fund Bonuses | The bank plans to sell new shares to raise cash in order to pay the nondeferred part of bonuses that exceed $79,000, The Wall Street Journal reports, citing an unidentified person familiar with the matter.
Current rules allow only for the cancellation or reduction of parts of bonuses that have been awarded but not yet paid.
Critics of hedge fund fees point out that several internal managers at Harvard's $26 billion endowment had to return parts of bonuses earned in prior years after the fund dropped 27percentt in 2008.
Some small firms are worried they would have to set up remuneration committees, which they will not have to do, and also issue equity to allow some parts of bonuses not to be paid in cash.
For the first time in many years, all top-10 players who were part of the bonus pool in 2009 will all receive a bonus pool payout.
Now for the noncash part of the bonus.
He was awarded the shares — some 5.7 million — as part of his bonus from 2009 to 2011.
