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Within the framework of the Capital Requirements Directive, the new rules outline principles for sound remuneration policies, which financial institutions have to comply with.



According to the new rules, remuneration policies must promote a sound and effective risk management and be in line with long-term interests of the company. The balance between fixed and variable pay must be proportional and where the remuneration is performance related, the assessment of the performance must be set in a multi-year framework. 40-60 pct. of the variable remuneration must thus be deferred over a period of 3-5 years. The rules also include restrictions on credit institutions that have received state aid.



"These rules are an important step forward towards a more sound risk culture in the finance sector", says Oliver Röthig, Head of UNI Finance. The rules apply more specifically to senior management, risk takers and other categories of staff with high remuneration and who carry out high risk activities. "UNI Finance stresses however that stakeholders, including workers' representatives must be involved in decisions on pay systems. There needs to be transparency."



Trade unions remain concerned that national legislators implementing the directive might be expansive in defining staff covered. A fundamental principle must be that regulation does not undermine the right of the social partners to negotiate collective agreements freely.