Bankers (SX7P) face a backlash from European Union lawmakers determined to cut their bonuses as part of a quest to reshape lenders as utilities like water and electricity providers rather than money-making machines. The European Parliament is proposing an array of amendments to a draft law implementing capital rules by the Basel Committee on Banking Supervision to attack the bonus culture legislators partly blame for bringing the region's economy to the brink of collapse. A vote is set for May 8. “A majority" of members “have had enough of banks living on a different planet than everyone else," Sharon Bowles, chairwoman of the assembly's economic and monetary affairs committee, said in an interview. “I think it's more than that though -- we want to change banks' behavior." Public outrage and shareholder rebellions have already led some banks to limit payouts. Barclays Plc (BARC) Chief Executive Officer Robert Diamond said last week that he will forgo about 11 percent of his total compensation until the bank improves profitability in a bid to placate investors opposed to his pay package. His move follows a decision by Citigroup Inc. (C)shareholders to reject that bank's executive pay plan. Lenders have struggled to find winning counter arguments to the EU parliament's plans, with lawmakers insisting that the tougher requirements are a cornerstone of their position on the draft Basel law. The European Banking Federation, a Brussels-based group that lobbies EU decision makers concedes that changing the minds of politicians will be “difficult." The debate “is more emotional than rational," the federation said in an e-mail. “It is a highly political issue." Among the dozens of amendments sought by members of the parliament is one by Othmar Karas, the Austrian Christian Democrat lawmaker leading work on the draft rules in the assembly, to ban bonuses that exceed a banker's salary. Karas toughened his earlier suggestion of capping bonuses at double fixed pay as part of a proposed compromise among the parliament's different political groups. The stricter approach has cross-party support, said Philippe Lamberts, a Belgian who's representing the parliament's Green group in the negotiations. Other parliamentarians have said maximum pay for bankers shouldn't be more than four times as high as that of the chief of their national watchdog, or more than three times as much as the salary of their nation's head of government -- such as the 142,500 pounds ($230,000) made by the U.K. Prime Minister David Cameron. What parliament is doing “is much more sophisticated than simple banker bashing," said Bowles, a member of the U.K. Liberal Democrats, which is part of the coalition government with Cameron's Conservatives. UBS AG (UBSN) will base Chief Executive Officer Sergio Ermotti's bonus on a wider range of criteria than profitability, including his progress in restoring the reputation of Switzerland's biggest bank, Chairman Kaspar Villiger said in an interview last week. Ermotti's predecessor, Oswald Gruebel, left last year after the bank uncovered a $2.3 billion loss from unauthorized trades. Ermotti joined UBS last April and took over as CEO after Gruebel resigned. He received 6.35 million francs ($7 million) last year, including 1.39 million francs in base salary, Zurich- based UBS said in its 2011 annual report, published last month, Bloomberg reported.
