The Financial Services Authority’s (FSA) code of practice on remuneration may put pressure on the rewards strategy of UK employers, it has been suggested.
Earlier this month, the FSA announced final regulations for bonuses and pay following a consultation with the industry.
As part of the consultation it was proposed that firms be given greater responsibility for ensuring that remuneration structures of senior employees and risk-takers are “consistent with and promote effective risk management”.
However, as a result of the news, left-wing think-tank Compass – with the backing of figures such as Liberal Democrats shadow chancellor Vince Cable, MP John Cruddas and Trades Union Congress general secretary Brendan Barber – has launched a campaign for a new High Pay Commission.
They have joined 97 others who are calling on the government to establish a High Pay Commission to review top pay and look at measures to ensure excessive pay does not damage the economy again.
Gavin Hayes, general secretary of Compass, said: “Given that the FSA last week failed […] to take any serious and decisive action, in particular on city bonuses, I think this strengthens the arguments for an autonomous High Pay Commission.”