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The report highlights a huge dispersion between different institutions and EU Member States regarding the amounts of remuneration awarded; but also in terms of pay structure, application of specific risk alignment requirements, as well as percentage of "risk takers" (i.e. staff identified as having a material impact on banks' risks and businesses).
In particular, practices regarding the deferral of variable remuneration differ significantly across Member States, depending on the application of the proportionality principle, which allows small and less risky institutions to be exempt from the deferral of variable remuneration when such deferral is disproportionate to their specific risk profile or where only minor amounts of variable remuneration are paid. The EBA is currently investigating the different application of the proportionality principle across Member States and individual institutions.
The report also shows that institutions have been reviewing their remuneration policies to comply with the new requirements introduced by the Capital Requirements Directive (CRD IV) and some firms have introduced so called ‘position or role-based allowances'. In general, these allowances, which are paid as fixed amounts in addition to the base salary, are considered by institutions as fixed remuneration. However, these allowances are discretionary, as they are paid to selected members of staff and in most cases only for limited periods of time. Under exceptional circumstances, they can also be cancelled.
The EBA is currently analysing this emerging practice and will set guidance criteria to correctly assign these elements to either variable or fixed remuneration, so as to ensure that these practices do not lead to a circumvention of the newly introduced cap between the variable and fixed component of remuneration