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London - Nearly two thirds of UK financial services firms have increased salaries in a bid to prevent an exodus of talent when the EU bonus cap takes effect next year, a survey found on Monday.
The cap, which lawmakers say is needed to crack down on excessive risk-taking at banks, sets a basic €500 000 salary threshold above which a bonus can be no higher than fixed pay, or twice fixed pay with shareholder approval.
Recruitment firm Robert Half Financial Services found 93% of financial services executives were concerned about losing staff to international opportunities due to the cap, which will apply to awards for performance from 2014 onwards.
As a result, 65% have increased salaries by an average of 20% to offset the cap's effect, while 60% have increased staff benefits, the survey showed.
More than half of the executives said they were 'very concerned' the bonus cap and resulting rise in base pay would create an unstable cost structure for their organisation.
