It was clear in the past that banks' payment systems needed to be connected to creating long-term value, to performance achieved throughout an entire business cycle, and not to next quarter's profit, with the view on bonuses to change in Romania, as well, bankers say.
The Supervisory Boards, which represent a bank's shareholders, decide the level of bonuses granted to top management teams.
"Bank executives received bonuses because they achieved the targets set by the Supervisory Boards. Nobody prevented members of the board from setting long-term targets, and from basing bonuses on them, they were free to do it but, pressured by shareholders, analysts and investment funds, they rushed to achieve short-term results," says Steven van Groningen, president of Raiffeisen Bank.
He says the modification of bonus systems within international banking groups will not have a major effect in Romania, where bonuses were not very significant.
Rasvan Radu, chief executive of UniCredit Tiriac, says the view on bonuses will change when Romanian banks change, and that it will be increasingly connected to the bank's performance, and even to that of the group it is a part of.
"A bonus needs to reflect the bank's longer-term performance. Just as major profit rises and of the credit portfolio are now a thing of the past, the salary increases of the last few years are no longer a present-day concern, either."
In the Western world, a heated debate has been going on for several months now on the levels reached by bankers' earnings and on the risks of such practices continuing despite the crisis not being over, as several large banks only survived thanks to the capital injections they received from governments.
Bonuses also peaked in the Romanian banking system in 2008, when many heads of banks were rewarded for the spectacular business growth a
