The Financial Services Authority (FSA) has published a consultation document on the disclosure of remuneration of financial services firms.
The FSA will ask banks to disclose information on their remuneration policies and pay-outs on an annual basis, according to the requirements of set out in the Capital Requirements Directive (CRD3).
Information to be disclosed includes the remuneration decision-making process, the link between pay and performance, and the design characteristics of the remuneration system.
The consultation period closes on 8 December and the FSA intends to publish a policy statement in mid-December.
Tom Gosling, reward partner at PricewaterhouseCoopers, said: “The Treasury has passed the disclosure baton to the FSA and the result has been a less onerous regime than originally feared. “The consultation sets out largely sensible disclosure requirements relating to banks' remuneration policies for senior management.
“The information should help shareholders make informed judgments about how remuneration takes account of risk in banks.
“The proposals do not include some of the more prescriptive elements of previous proposals, such as disclosure by pay bands.
“This should help prevent the unintended consequences that can sometimes follow pay disclosure, for instance pay ratcheting.”
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