Bankers Face Cash Limits, Funds Escape EU Bonus Rules

Bankers will face limits on cash payouts and the size of their bonus relative to salary from the start of next year, as European Union regulators approved laws to curb incentives for excessive risk-taking.

The rules limit bankers to receiving about 25 percent of their bonuses in immediate cash payouts, the rest either deferred or held in shares for a minimum of three years. Many hedge funds will avoid rules on share awards depending on their “prudential risk profile,” the Committee of European Banking Supervisors said in an e-mailed statement today.