Goldman Sachs has made a significant move by lifting the cap on bonuses for its top bankers in the UK, a decision that comes months after the country abandoned the policy inherited from the European Union. This cap, initially imposed in 2014 by the EU and later discarded by the UK following its exit from the union, aimed to curb excessive risk-taking among bankers, a practice often blamed for the 2008 global financial crisis.

Under the EU policy, bonuses were limited to twice the basic pay with shareholder approval. However, banks frequently raised fixed salaries to bypass this restriction. With Goldman Sachs removing the cap, it seeks to revamp the compensation structure for its “material risk takers,” a category of employees whose performance significantly impacts the bank’s operations. This change is aimed at providing greater flexibility in managing fixed costs and aligning pay with performance.

A spokesperson for Goldman Sachs emphasized that this adjustment brings the UK closer to the compensation practices observed in other major financial hubs globally, positioning the country as an attractive destination for top talent. The move reflects the bank’s strategic approach to talent management and its commitment to maintaining competitiveness in the financial sector.