CBI: EU bonus cap 'sets dangerous precedent'

The Confederation of British Industry (CBI) has hit out at European Union proposals to cap bankers' bonuses at a year's salary.

These proposals fly in the face of efforts to align pay and performance.

They would significantly constrain shareholders' ability to hold companies to account by voting on pay policy and implementation, and to select board members.

Ratios will also make it harder for companies to respond to a downturn by adjusting pay, which undermines financial stability.

We're concerned that this proposal sets a dangerous precedent and could spill over into other sectors, damaging jobs and growth.

– Matthew Fell, CBI director for competitive markets