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5th January 2016

EBA issues finalised Remuneration Policies Guidelines

Just before Christmas, the European Banking Authority (EBA) published their final guidelines on sound remuneration policies.

The implementation date has now been revised to the 1st January 2017 and the rules will first apply to the 2017 performance year.

As such, firms will no longer need to change their existing pay practices for the 2016 performance year.

Since the consultation version of the Guidelines was issued, key changes include:

• Guideline changes on long term incentive plans, with valuation of LTIPs at award rather than at vesting;
• The restatement of the proportionality principle under Article 92(2) CRD except in relation to the bonus cap; and
• Clarification as to how the guidelines apply to carried interest payments.

The next step for this proposed regulation is that the FCA, in conjunction with the PRA and HM Treasury, will review the proposed changes to the Guidelines and their application to the market in the United Kingdom, and will then enter into consultation on any necessary changes to the UK domestic rules and guidance.

Read the EBA’s Final Guidelines on Sound Remuneration Policies here.

Final Remuneration Guidelines issued by EBA