Featured Product

    EBA Releases Report on Benchmarking of Remuneration Practices in Banks

    July 22, 2020

    EBA published a report on the benchmarking of remuneration practices in banks in EU. The report analyzes the 2018 data reported for high earners as well as the 2017 and 2018 remuneration benchmarking data, with information on all identified staff and an overview of the number of institutions where shareholders approved higher ratios of the variable to fixed remuneration than 100%. As in previous years, the report shows that remuneration practices in institutions were not sufficiently harmonized. The application of deferral and payout in instruments differed significantly across member states and institutions. This is mainly due to differences in the national implementation of the Capital Requirements Directive (CRD) IV that in many cases allow for waivers of these provisions when certain criteria are met. Following the amendments of CRD IV, which will apply as of the end of 2020, a higher degree of harmonization is expected.

    All 28 member states of the EU and three additional European Economic Area member countries participated in the benchmarking data collection. The data show that, in 2018, the number of high earners in EU banks receiving a remuneration of more than EUR 1 million increased slightly by 1.58%, from 4,861 in 2017 to 4,938 in 2018. The number of identified staff decreased significantly from 53,382 in 2016 to 47,596 (–10.83%) in 2017 and 47,154 in 2018 (–0.93%). In 2018, overall only 1.73% and, in 2017, only 1.76%, of all staff in institutions were identified staff, which represents a material reduction compared to 2.00% in 2016. After an increase from 57.09% in 2016 to 66.62% in 2017, the average ratio of variable to fixed remuneration decreased to 62.84% in 2018. The average remuneration for identified staff increased by 12.59% from 2016 to 2017 and by 0.28% from 2017 to 2018. The strong increase in 2017 goes hand in hand with the reduction of the number of identified staff in a few institutions that resulted in an overall more senior composition of identified staff. Overall, there was an increase in the number of institutions where shareholders had approved the use of ratios for the variable to fixed remuneration of above 100%.

    EBA highlights that it plans to review the guidelines on the data collection on high earners and the guidelines on benchmarking of remuneration, taking into account the entry into force of the Investment Firms Directive (2019/2034/EU) and the mandates for EBA to develop a separate set of guidelines for investment firms. In addition, EBA will continue to benchmark remuneration trends every two years and to publish data on high earners annually to closely monitor and evaluate developments in this area.


    Related Links

    Keywords: Europe, EU, Banking, Remuneration Practices, CRD IV, Operational Risk, Benchmarking Exercise, High Earners Data, Governance, EBA

    Featured Experts
    Related Articles
    News

    APRA Publishes Results of Climate Risk Self-Assessment Survey

    The Australian Prudential Regulation Authority (APRA) has published the findings of its latest climate risk self-assessment survey conducted across the banking, insurance, and superannuation industries.

    August 04, 2022 WebPage Regulatory News
    News

    ACPR Publishes Updates Related to CRD IV and Covered Bonds

    The French Prudential Supervisory Authority (ACPR) published a notice related to the methods for calculating and publishing prudential ratios under the Capital Requirements Directive (CRD IV) and the minimum requirement for own funds and eligible liabilities (MREL).

    August 03, 2022 WebPage Regulatory News
    News

    BIS Paper Contributes to Debate on Regulating NBFIs and Big Techs

    The Financial Stability Institute (FSI) of the Bank for International Settlements recently published a paper proposing a framework for classifying financial stability regulation as either entity-based or activity-based.

    August 03, 2022 WebPage Regulatory News
    News

    EIOPA Publishes Guidance on Climate Change Scenarios in ORSA

    The European Insurance and Occupational Pension Authority (EIOPA) published the risk dashboard based on Solvency II data and the final version of the application guidance on climate change materiality assessments and climate change scenarios in the Own Risk and Solvency Assessment (ORSA).

    August 02, 2022 WebPage Regulatory News
    News

    EBA and ECB Respond to Proposals on Sustainability Disclosures

    The European Banking Authority (EBA) and the European Central Bank (ECB) published their responses to the consultations of the International Sustainability Standards Board (ISSB) and the European Financial Reporting Advisory Group (EFRAG) on sustainability-related disclosure standards.

    August 01, 2022 WebPage Regulatory News
    News

    BIS Report Notes Existing Gaps in Climate Risk Data at Central Banks

    A Consultative Group on Risk Management (CGRM) at the Bank for International Settlements (BIS) published a report that examines incorporation of climate risks into the international reserve management framework.

    July 29, 2022 WebPage Regulatory News
    News

    EBA Publishes Multiple Regulatory Updates for Regulated Entities

    The European Banking Authority (EBA) published the final guidelines on liquidity requirements exemption for investment firms, updated version of its 5.2 filing rules document for supervisory reporting, and Single Rulebook Question and Answer (Q&A) updates in July 2022.

    July 29, 2022 WebPage Regulatory News
    News

    EIOPA Issues SII Taxonomy and Guide on Sustainability Preferences

    The European Insurance and Occupational Pensions Authority (EIOPA) published Version 2.8.0 of the Solvency II data point model (DPM) and XBRL taxonomy.

    July 29, 2022 WebPage Regulatory News
    News

    EESC Opines on Proposals on CRR and European Single Access Point

    The European Union published, in the Official Journal of the European Union, an opinion from the European Economic and Social Committee (EESC); the opinion is on the proposal for a regulation to amend the Capital Requirements Regulation (CRR).

    July 29, 2022 WebPage Regulatory News
    News

    HM Treasury Publishes Multiple Regulatory Updates in July 2022

    HM Treasury published a draft statutory instrument titled “The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2022,” along with the related explanatory memorandum and impact assessment.

    July 29, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8423