LONDON Bank of America Merrill Lynch (BAC.N) is raising salaries for some of its senior bankers by about 20 percent, a person familiar with the matter said on Monday, to get around a new European Union cap on pay.
EU rules that limit bonuses to no more than annual salary, or twice that with shareholder approval, came into force last month. Many financial institutions, worried about losing top talent to international competitors, are restructuring pay as a result.
Under the plan, the salaries of Bank of America front office managing directors based in the EU will be $500,000 and the bank is considering handing out extra cash payments to senior staff twice a year which will count as fixed salary rather than a bonus, the person said.
A Bank of America spokesperson declined to comment.
In November Barclays (BARC.L) unveiled a plan to give senior bankers additional monthly payments and last month an industry source said HSBC (HSBA.L) is considering giving out shares to about 1,000 top-ranking staff.
(Reporting by Clare Hutchison; Editing by Louise Ireland)