The Nordic bonus debate continues unabated. After relatively polarized moves among the region's largest banks over the past couple of weeks, Handelsbanken's chief executive has questioned the need for variable compensation and presented the case for fixed pay in the industry.
Pär Boman, chief executive of the Nordic region's second largest bank, has suggested that there's no commercial rationale for paying bonuses and that there should be a shift towards longer term incentives.
"I do not believe you can combine long-term commitments with short-term incentives or you will have a mismatch," he told the FT. "That doesn't mean I'm against bonuses in principal but, in our company, we cannot see they will help us develop the bank in the long-term."
The majority of Handelsbanken's employees are on fixed salaries, he says, reflected in the comparatively modest SEK381m set aside for bonuses this year. This is still up from the SEK230m paid in 2008, though.
Handelsbanken has emerged from 2009 in good shape, relative to its Nordic peers - posting an operating profit of SEK13.7bn - which it puts down to more conservative lending practices.
The rising public anger around banking bonuses in the Nordic region has prompted contrasting reactions. Swedbank has cancelled bonuses for 2009 and SEB chopped performance related pay by 64%.
Nordea, meanwhile, has set aside SEK2.8bn for its bonus pot, largely down to its more significant investment banking operation. Danske Bank has also increased bonuses by 14% this year.
This was largely down to the need to reward staff within its capital markets divisions, because they operate in "highly competitive international markets"
Handelsbanken Capital Markets' operating profits grew by 8% to SEK372m this year, and staff costs increased by 12%.