Center For Economics & Business Research Projects 60 Percent Reduction In Bonuses Of London Bank Executives

October 9, 2008 1:25 p.m. EST

London, England (AHN) - The question over excessive chief executive officer paychecks has moved from Wall Street to Paternoster Square in London as British Prime Minister Gordon Brown vowed there would be no fat bonuses for executives of bailed out banks.

Instead of hefty pay slips, Brown promised to punish British bankers who acted irresponsibly and took excessive risks, which caused the collapse of major U.K. financial institutions.

Brown said, "The days of big bonuses are over. One of the conditions of us helping the banks is that we will have to reach an agreement about their executive remuneration."

The Center for Economics and Business Research estimates London bonuses will tumble down 60 percent to $6.05 billion (3.5 billion pound) after British banks announce their 2008 results. For 2009, the bonuses will further fall 70 percent to $4.7 billion (2.7 billion pound), the CEBR said.

Richard Snook, senior economist of CEBR, told the U.K. Telegraph, "With shareholders likely to include the Government in some cases, and the Financial Services Administration breathing down employers' necks and a labor market with plenty of people available, it is unlikely that we will see bonuses paid on the scale of the past four years in the foreseeable future."

Snook added within the next three years, bonuses would be halved of 2007 level, which was the peak.