'Reveal top earners' - UK review

London - British banks should be forced to disclose the number of employees who earn more than £1m ($1.65m) a year, a government-commissioned review of corporate governance in banks said on Thursday.

The report from David Walker, former chairman of Morgan Stanley International, proposed other measures to rein in risky activities at banks. It recommended strengthening the role of non-executives to give them new responsibilities to assess risk and payment and said active investors should sign up to stewardship duty so that they can play a more active role as owners of businesses.

"Institutional investors should be less passive and prepared to engage earlier if they suspect weaknesses in governance," Walker said in the report. "Early preventive medicine through shareholder engagement can save everyone substantial time and money later on."

Walker said during the financial crisis there was a narrow focus on pay received by banks' executive board members - but bank owners knew little about cash paid out to the much larger number of high-earning non-executives.

"My proposals will provide much greater information to owners (of banks) to say, 'Hang on a minute, why are you paying so many people so much money?"' he told the BBC.

He said he believed there were well over a thousand people earning more than £1m a year in London's banks and financial institutions.

The report also recommended that two-thirds of cash bonuses should be deferred and that at least half of variable pay or bonuses should be paid in the form of a long-term incentive scheme.

The report was commissioned by British Prime Minister Gordon Brown in February.

- Sapa