EU Group Takes Aim at 'Fat Cat' Bonuses
Top managers' perks will figure high on the agenda of tonight's meeting of euro zone ministers, the Eurogroup, in Brussels, with many European officials calling for curbs on bonuses and pay, papers reported on Tuesday.
The group believe the Anglo-Saxon market model is a danger to global financial stability and are concerned that companies are chasing immediate profits at the cost of massive layoffs, a document leaked to Spanish newspaper El Pais shows.
According to the document, the "short-term" pay structure of modern capitalism has become deformed, making companies to take on "excessive risks" without considering the interests of shareholders or society, London newspaper the Telegraph reported on its Web site.
Calls for a crackdown on executive pay and more regulation to discipline the markets have been heard across Europe since the beginning of the credit crunch.
Among suggested solutions were a Europe-wide regulator and restraints on investment by sovereign wealth funds and private equity companies.
A Dutch bill due to be discussed in parliament imposes a 30 percent supertax on pay packages above 500,000 euros ($750,000) and limits bonuses and stock options to 100 percent of pay, the Telegraph reported.
Three reports in the European Parliament explore curbs on hedge funds, private equity and the bonus system, Ieke Van Den Burg, MEP and Dutch Labor leader in Brussels, told the London paper.
"The short-term focus of the industry has been disastrous. Private equity has left companies crushed by high debt, and people are very angry at what has happened. We want to control the levels of leverage and make sure they are forced to keep more of the risk," Ieke Van Den Burg said.