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Almost one bank in five demanded money back from its employees in 2011

Only 14 percent of international banking institutions and insurance companies worldwide have recovered already-paid remuneration payments from employees in 2011 (“clawback”), because the relevant employees and management had committed violations or financial restatements occurred. Another three percent have asked for the payments but not yet collected. Meanwhile, 62 percent of the world's banks have introduced so-called “clawback rules”. This emerges from a study by Mercer, surveying 63 companies in the finance and insurance industries worldwide. According to the survey 44 percent of the banks, especially in North America, had introduced the so-called clawback rules that allow the recovery of salary before the year 2011. Since then a reported additional 18 percent of banks and insurers have followed suit. The introduction of the recovery clauses was supported by regulatory authorities in Europe and North America after the 2008 financial crisis, as a means to control risk-taking by relevant staff. The most common triggers for reducing remuneration under the malus system are financial loss or loss of performance of the company (67 percent) or a division (54 percent), and individual violations of the conduct code (56 percent).