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Regulator to Link Golden Chute Bonus to Debt Payback in Problem Banks

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Russia's Deposit Insurance Agency suggested paying "golden parachutes" for top-managers of failed banks only after covering the banks' debts rather than directly after a manager's dismissal, Izvestia daily reported late on Monday quoting the agency's First Deputy General Director Valery Miroshnikov as saying.

Russia's Deposit Insurance Agency suggested paying "golden parachutes" for top-managers of failed banks only after covering the banks' debts rather than directly after a manager's dismissal, Izvestia daily reported late on Monday quoting the agency's First Deputy General Director Valery Miroshnikov as saying.

A bill to exclude "golden chutes," lucrative benefits such as bonuses and severance pay given to top executives resulting from the loss of their job, from the list of payments after dismissal is likely to be presented in March to Russia's State Duma, the country's lower house of parliament.

"It is unfair that depositors receive less funds because delinquent managers credit millions [of rubles] to their accounts [as bonuses]," Miroshnikov told the paper, adding that top managers received "golden chutes" directly before the bank's bankruptcy in many cases.

"Why do we have to pay money to people guilty of problems?" he added.

Independent lawyers and Duma officials told Izvestia that the regulator's idea was clear but it was difficult to implement it in practice.

 

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