Member States will be required to apply restrictions to all bankers’ bonuses received after January 1st 2011 following a vote by MEPs.

Bonuses paid upfront in cash will be capped at 30% of their total value, with unusually large bonuses being capped at 20%.

Between 40% and 60% of all bonuses will have to be deferred for at least three years, with this portion being recoverable if investments do not perform as predicted.

At least 50% of the value of the bonus would be paid as "contingent capital" (funds which banks can call upon in case of financial difficulty) and as shares. The maximum value of all bonuses will be determined as a proportion of the salary of the employee.

In order to eliminate the disproportionate part that bonuses currently play in the financial sector, all banks will have to set limits on bonuses related to salaries.

For banks which have been bailed out, there will be special measures put in place to cap the overall amounts they can pay in bonuses.

Finally, the new rules stipulate that no bonuses should be paid to bank directors unless they can be fully justified in terms of performance.

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