Comparing pay packages across countries and continents is getting more complicated. That could make international relocation less attractive both generally, and to some locations in particular.
Take London. With an election imminent and his party trailing in the polls, Alistair Darling, the UK's Chancellor of the Exchequer, announced a 50 percent tax on banker bonuses and plans to raise income tax rates starting in April. The steps aren't meant solely to bash bankers: the UK is struggling to get a handle on a record budget deficit that's climbed to a staggering 12 percent of GDP - some of which stemmed from bailing out financial institutions.
The new bonus tax kicks in above 25,000 pounds and falls directly on the bank, not the bonus recipient. Still, by making bonus payments more costly for employers, it will obviously impact compensation decisions. "If they insist on paying substantial rewards, I am determined to claw money back for the taxpayer," Darling told Parliament, according to Bloomberg News.
Proposals to clamp down on bank bonuses, whether by tax or regulation, have been percolating in a number of G-20 countries for some time. The discussion has been particularly fierce in the UK. It's sparked talk of a mass exodus of bankers - especially from government-controlled Royal Bank of Scotland, where compensation has been pared back even more sharply than at the handful of U.S.-based institutions under the authority of White House pay czar Kenneth Feinberg.
For both employees and HR planners, the spread of government-impelled compensation rules introduces a new element into location decisions. Besides equating exchange rates and income tax rates across jurisdictions, company managements and individual professionals now must also forecast and compare different national rules limiting bonuses, cash compensation, stock compensation and related regulations.
The likely result is what John Benson, eFinancialCareers' London-based chief executive, calls a "multi-level playing field."
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