DOHA/DUBAI: Qatar’s central bank is capping bonuses for board members of commercial banks in the country, it said in a circular to banks yesterday, in a rare move to influence executive compensation.
The central bank did not give reasons for the restrictions in its circular. Central bank officials were not available to comment on the policy. The global financial crisis aroused widespread anger against lavishly paid bankers in the West, prompting the European Union to cap banking bonuses.
The Emir H H Sheikh Tamim bin Hamad Al Thani has taken a number of steps to spread the country’s gas wealth more widely among all Qataris. He has vowed to crack down on corruption and business monopolies, while $880m worth of shares in a state petrochemical firm were sold at a discounted price to citizens.
The maximum annual bonus for a chairman of the board of a bank in Qatar has been set at QR2m($550,000), while the cap for a board member is QR1.5m.
Bonuses can only be granted if a bank makes a net profit and 5 percent of bank capital is distributed to investors. No bonuses can be distributed without the central bank’s approval. REUTERS