But from the public disclosures(in Pillar III), what I gather about the implementation is that
- Stringent performance targets will be set covering profit, risk, people etc. These targets will be mostly in number of shares/options.
- The performance bonus will be adjusted for 'risk'(any adjustment to be DOWNwards only)
- Even after that, the vesting of the options/shares will be subject to clawback, deferral and overall group criteria in terms of total shareholder return, economic profit etc.
- And finally, a significant number of people will be awarded Zero bonuses.
- Immediate cash component will be capped at 10%(viz $1MM-for RBS it is 2000GBP!!!!)
- The rest will be paid out in terms of restricted shares-subject to market price risk and insolvency risk
- The bonus can be clawed back for N number of reasons-including quitting the organization etc