FACTBOX: Noose tightens on bankers' bonuses, but how much?

(Reuters) - France, supported by Germany, wants finance ministers from the Group of 20 economies to back tougher curbs on bonuses in the financial sector when they meet on Friday and Saturday to prepare for a G20 summit on Sept 24-25.

French President Nicolas Sarkozy says banks are not heeding lessons from the credit crunch and wants G20 leaders to back a "tax and cap" on bonuses. However, British Prime Minister Gordon Brown said he was "unenthusiastic."

Banks such as Citigroup and Bank of America are already forging new employment contracts that let them void compensation agreements if they are challenged by the U.S. government.

Following are key developments in remuneration policy:

G20 -- In April leaders endorsed principles from the Financial Stability Board, comprising central bank, regulatory and finance ministry officials from each of the G20 countries, to ensure "compensation structures are consistent with firms' long-term goals and prudent risk-taking."

-- Leaders agreed there should be "significant progress" in applying these principles nationally by the 2009 bonus round. Supervisors should intervene in pay policies, if necessary, with measures that can include higher bank capital requirements.

FRANCE -- French President Nicolas Sarkozy announced new limits on bonus payments to bank traders on last week. He said banks would henceforth be required to defer two thirds of bonuses paid to traders over three years and make a third of the payout in bank stock. If an operation on which a bonus was paid lost money in the two years afterwards, the deferred part of the bonus would not be paid out.

-- French banks adopted a code of conduct in February based on general guidelines provided by the G20 aimed at ending huge guaranteed bonus payments.

-- French leaders complained in August when domestic bank BNP Paribas set aside a billion euros for bonuses.

EUROPEAN UNION -- The European Commission proposed a draft law in the 27-nation European Union in July that gives national supervisors powers to fine or require banks to hold higher capital if pay policies encourage overly risky behavior.

-- Bonuses must not be a disproportionately large part of overall pay or purely focused on an individual but must take into account the performance of the business unit and company.

-- It requires approval from the European Parliament and EU states to take effect in 2011. It aims to apply a set of Commission guidelines on remuneration for member states.

GERMANY -- Market supervisor Bafin has unveiled new rules that will force bankers to repay their bonuses if they take unjustifiable risks.

-- Bonuses will be tied to the success of the organization as a whole and banks have until the end of 2009 to apply the rules.

-- Chancellor Angela Merkel has called for an international ban on bonus payments to bankers if their business year was bad.

-- Germany's 500 billion euro bank rescue package included a clause saying salaries above 500,000 euros per year are considered inappropriate for managers in banks using the fund.

BRITAIN -- The Financial Services Authority this month banned guaranteed bankers' bonuses of more than one year, saying it was leading a global crackdown on excessive risk-taking. The code will affect 26 major banks operating in Britain.

-- The FSA said it would review the rules if other countries failed to follow suit, thus putting Britain at a competitive disadvantage.

-- Fury erupted in Britain over news that Royal Bank of Scotland, which needed a government rescue, was paying an annual pension of 703,000 pounds ($1 million) to its former chief executive Fred Goodwin. Months later, after a campaign that included windows of his Edinburgh home being smashed, Goodwin agreed to reduce his pension, to 342,500 pounds annually.

-- News also emerged last month that Britain's Barclays was seeking to poach five JP Morgan investment bankers with a bonus package worth up to 30 million pounds.

UNITED STATES -- U.S. House of Representatives has approved a bill that would require separate shareholder votes on golden parachutes and empower regulators to ban pay structures that encourage inappropriate risks. It is not clear whether the Senate will approve the bill.

-- The bill was passed a day after a report that more than 4,700 bankers and traders got 2008 bonus payments of $1 million or more at large banks bailed out by taxpayers.

-- Congress in February restricted bonuses and other forms of pay for top managers at banks and companies that got help under the government's $700-billion financial industry bailout. The Obama Administration has appointed a "pay tsar," Kenneth Feinberg, who has authority to claw back money already paid.

-- There was public anger when news broke in March that insurer AIG, which has received more than $180 billion in public aid, paid more than $165 million in bonuses to employees.

IRELAND -- Ireland unveiled a beefed-up rescue program for its two main lenders on February 11. As part of the package, total remuneration for all senior executives would be reduced by at least 33 percent. No performance bonuses would be paid for these executives and no salary increases would be made in relation to 2008 and 2009.

(Reporting by Huw Jones; Editing by Ruth Pitchford)