Banks are under fresh pressure to penalise executives who may have been responsible for one of the worst consumer scandals in decades (according to the FT http://www.ft.com/cms/s/0/3ab436ae-4b35-11e1-88a3-00144feabdc0.html#axzz1lKdLIixo ) after lobby groups backed calls to claw back bonuses for the mis-selling of Payment Protection Insurance (PPI).
Millions of pounds in awards should be investigated in light of the scale of the refunds set aside for victims of PPI, industry watchers have insisted.
The demand echoes that of the Financial Services Authority (FSA), which has urged banks to strip bonuses paid out to those who were in charge when the controversial PPI was sold. Banks have taken note of the FSAs request and are expected to provide more details of their efforts in their annual reports. One said it was “exploring every possible avenue” in its attempts to reclaim past bonuses.
Public anger over banker remuneration has already led Stephen Hester, chief executive of Royal Bank ofScotland, to give up his £1m bonus this year, following an intense political and media campaign. A number of banks have said that PPI will be a factor in this year’s pay talks, but none have so far managed to reclaim bonuses paid out in the past.
Under the regulator’s rules, deferred awards can be cut if the business suffers a material failure of risk management or downturn in performance. It has been claimed that unless the industry’s billion pound provision for mis-sold PPI was reflected in current remuneration arrangements, the banks would be in breach of the City regulator’s pay code.
Some banks said they stopped selling the majority of PPI by the time the claw back rules were introduced in 2009, potentially making it difficult for them to retrieve previous awards to executives involved in the scandal. Bob Diamond, chief executive of Barclays, has previously told a parliamentary committee that PPI would be a factor in the bank’s pay talks this year. But Anthony Jenkins, former chief executive of Barclaycard, said those responsible had mostly left the bank.
“The PPI problem dates back to the start of the last decade,” he said. “The people who were leading the business at that time and who had accountability for this have left the organisation,”
Sally Bowyer, Managing Director of leading financial claims firm Brunel Franklin, said that consumers could recoup many years’ worth of premiums plus interest. “If you were mis-sold PPI, you may be entitled to several years’ premiums plus 8% interest, which can in some cases amount to several thousands of pounds.”
Learn more about PPI refunds and find out if you could apply for a refund today! Visit the website www.brunelfranklin.com or call Brunel Franklin, free, on 0800 051 54 51