The European Union has agreed a deal restricting the terms of banker's bonus pay outs starting from as soon as next year.
The deal worked up within with the European Parliament means bankers can only get 30% of bonuses immediately in cash or 20% for larger sums. The rest of the bonus payments will be paid later and linked to long-term performance, with 50% paid in shares.
However, the rules still don’t limit the size of the bonus, just the structure of the pay out in cash and shares. The agreement reached by the G20 countries last year fell short of imposing caps on the amounts bankers could be paid in bonuses.
Hedge funds will also be covered by the new rules, according to a report by the BBC, confirming that this is the first time hedge fund manager pay has been regulated.
Large pay outs to departing executives will also be limited.
