EBA Proposes Guidelines on Remuneration Benchmarking, High Earner Data
The European Banking Authority (EBA) proposed to update the guidelines on the data collection exercise on high earners and the remuneration benchmarking exercise under the Capital Requirements Directive (CRD). A separate and specific set of new guidelines has been provided for investment firms under the Investment Firms Directive (IFD). The additional revisions to the guidelines for institutions and the new guidelines for investment firms reflect the changes made to remuneration and disclosure requirements as well as the new remuneration framework for investment firms. The feedback period for the proposed sets of guidelines ends on March 21, 2022.
The proposed guidelines on remuneration benchmarking exercise integrate additional requirements introduced by CRD5 regarding the application of derogations to the requirement to pay out a part of variable remuneration in instruments and under deferral arrangements and the benchmarking of the gender pay gap. The proposal also includes guidance on how to harmonize the benchmarking of approvals granted by shareholders, to use higher ratios than 100% between the variable and fixed remuneration. The approach taken in the draft guidelines for investment firms is consistent with the corresponding guidelines for banks. The templates for the data collection have been revised, also taking into account the European Commission’s Implementing Regulation on disclosures. Additional information is collected on the application of the derogations to the application of the requirements to pay out parts of the variable remuneration in instruments and under deferral arrangements. The benchmarking of the gender pay gap will allow competent authorities to monitor the implementation of such measures and their development at different levels of pay. The guidelines aim to ensure that the benchmarking of the gender pay gap covers a representative sample of institutions. Specific templates for the benchmarking of the gender pay gap have also been introduced.
The proposed guidelines on the data collection exercise on high earners reflect the amended remuneration framework laid down in CRD5, including the introduction of derogations to pay out a part of the variable remuneration in instruments and under deferral arrangements. In addition, the need to update these guidelines stems from the specific remuneration regime that has been introduced for investment firms and is laid down in the Investment Firms Directive (IFD) and Investment Firms Regulation (IFR). The CRD and the IFD require competent authorities to collect information on the number of natural persons, per institution and investment firm respectively, who are remunerated EUR 1 million or more per financial year, in pay brackets of EUR 1 million. The information should also include details on their job responsibilities, the business area, and the main elements of the salary, bonus, long-term award, and pension contribution. The new reporting format included in the revised guidelines will be used for the annual collection of data regarding high earners, starting for the financial year that ends in 2022. For the financial year 2021, the high earners data collection exercise will be conducted under the existing guidelines for both institutions and investment firms, unless the latter are small and non-interconnected.
Related Links
- Press Release on Remuneration Benchmarking
- Proposed Benchmarking Guidelines Under CRD (PDF)
- Proposed Benchmarking Guidelines Under IFD (PDF)
- Press Release on High Earner Data
- Proposed Guidelines on High Earner Data (PDF)
Keywords: Europe, EU, Banking, Basel, Governance, Operational Risk, Guidelines, CRD, IFD, IFR, Investment Firms, Disclosures, Benchmarking Exercise, Reporting, Remuneration Benchmarking, High Earners Data, EBA
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Related Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
