Qatar's central bank is capping bonuses for board members of commercial banks in the country, it said in a circular to banks on Monday, in a rare move by one of the wealthy Gulf oil exporters to influence executive compensation.
The central bank did not give reasons for the restrictions in its circular, which was posted on its website. 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. But while Qatar's banking sector required government aid, the economy escaped serious damage.
Since becoming emir last June, however, Sheikh Tamim bin Hamad al-Thani has taken a number of steps to spread the tiny country's gas wealth more widely among all Qataris. He has vowed to crack down on corruption and business monopolies, while $880 million 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 2 million riyals ($550,000), while the cap for a board member is 1.5 million riyals.
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.
Commercial Bank of Qatar, the country's second biggest bank by assets, said in its 2012 annual report that the total remuneration of its nine-member board, including fixed payments and meeting attendance fees, was 46.08 million riyals. That was up from 41.45 million riyals in 2011.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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