LONDON, Feb 2 (Reuters) - Britain has called on major institutional investors such as Standard Life and Aviva to fight excessive bonus payments at banks in which they own shares, the finance ministry said on Tuesday.
'Remuneration policies, tilted in favour of risk, might be good for traders. But they are not good for customers, employees, creditors and owners of banks -- or the taxpayer,' said financial services minister Paul Myners.
Britain has tried to limit pay at banks such as Lloyds Banking Group and Royal Bank of Scotland in which it owns major stakes, but is restricted by the high levels of pay on offer at rival banks.
Myners sent letters to several dozen institutional investors on Thursday and is awaiting replies, but expects investors to take notice of the fact that returns on bank shares over the past decade have been far less than what investment bankers have received in pay.
'It is time to redress this balance,' he wrote.
The Association of British Insurers said last month it wanted a 'constructive dialogue' with the companies its members invest in over executive pay.
Britain has introduced a one-off tax on 2009 bonuses, but this has not dissuaded many banks from rewarding staff highly.
Myners argued banks had only made profits last year because of direct or indirect government and central bank action worldwide to stem the financial crisis triggered by trading in sub-prime mortgages in the United States earlier that decade.
(Reporting by David Milliken; Editing by David Holmes) Keywords: BRITAIN BANKS/PAY (Reuters Messaging: david.milliken.reuters.com@reuters.net; david.milliken@reuters.com; +44 20 7542 5109) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
'Remuneration policies, tilted in favour of risk, might be good for traders. But they are not good for customers, employees, creditors and owners of banks -- or the taxpayer,' said financial services minister Paul Myners.
Britain has tried to limit pay at banks such as Lloyds Banking Group and Royal Bank of Scotland in which it owns major stakes, but is restricted by the high levels of pay on offer at rival banks.
Myners sent letters to several dozen institutional investors on Thursday and is awaiting replies, but expects investors to take notice of the fact that returns on bank shares over the past decade have been far less than what investment bankers have received in pay.
'It is time to redress this balance,' he wrote.
The Association of British Insurers said last month it wanted a 'constructive dialogue' with the companies its members invest in over executive pay.
Britain has introduced a one-off tax on 2009 bonuses, but this has not dissuaded many banks from rewarding staff highly.
Myners argued banks had only made profits last year because of direct or indirect government and central bank action worldwide to stem the financial crisis triggered by trading in sub-prime mortgages in the United States earlier that decade.
(Reporting by David Milliken; Editing by David Holmes) Keywords: BRITAIN BANKS/PAY (Reuters Messaging: david.milliken.reuters.com@reuters.net; david.milliken@reuters.com; +44 20 7542 5109) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.