French Restrictions on Executive Compensation

Blogger Urbanomics recently posted on France's restrictions of executive compensation.
"It is now well acknowledged that incentive arrangements skewed towards short-term returns that faced bankers, fund managers and traders played a critical role in inflating the sub-prime bubble and causing the deepest economic recession since the Great Depression. Accordingly, all recent efforts at regulatory reforms to impose greater oversight on the financial markets have sought to place curbs on executive compensation.

However, nothing substantial has till date been legislated or decreed into action. In the circumstances, the French government has taken the lead by concluding an agreement with the leading banks to limit executive compensation. It was agreed that up to two-thirds of bonus payments should be deferred for three years, while a third should be paid in shares of the bank. It was also agreed that the bonuses would be paid out based on the performances of the bank as a whole and not that of particular trading desks."

Read the whole post.

Also see this New York Times article:
French Bankers Accept Restrictions on Bonuses