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|Title:||Discussions in Europe on variable compensation in the financial sector||Authors:||Hengel, Ruben van den||Keywords:||DRNTU::Social sciences::Economic theory::Public finance||Issue Date:||2014||Source:||Hengel, R. v. d. (2014). Discussions in Europe on Variable Compensation in the Financial Sector (EUC Working Paper, No. 20). Singapore: EU Centre.||Series/Report no.:||EUC working paper, No. 20-14||Abstract:||Bonuses – which are often used to mitigate principal-agent problems and to encourage employees to work harder – have increased tremendously in the financial sector during the last decade, and have often been seen as a contributing factor to the financial crisis of 2008. The recent European Union (EU) action to adopt a policy that restricts bonuses paid to bankers may seem promising at first, but this does not address the real issues behind variable rewards. Compensation policies should be changed to encourage responsible risk-taking and decision-making through the implementation of broader performance metrics, forfeitable holdbacks and hybrid bonds. Furthermore, a change in organisational culture is needed to improve ethical behaviour leading to a re-balancing of stakeholders’ interests in the financial sector.||URI:||https://hdl.handle.net/10356/103872
|Rights:||© 2014 EU Centre in Singapore.||Fulltext Permission:||open||Fulltext Availability:||With Fulltext|
|Appears in Collections:||EUC Working Papers|
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