Cebs publishes guidelines on bankers’ pay

The Committee of European Banking Supervisors (Cebs) has published its final guidelines on bankers’ pay and bonuses.

Cebs has revised its initial proposal in order to address the main issues, namely proportionality, equity-linked and other instruments of variable remuneration, distribution of those instruments and retention periods.

In a statement Cebs said: “As to proportionality, a key principle applying both to the general as well as to the specific requirements of the capital requirements directive (CRD III), the revised guidelines have included further neutralisation of some requirements for investment firms if they have a lower prudential risk profile.

“In the chapter on groups, minor amendments have been introduced to clarify the application of the guidelines on a consolidated basis, thereby confirming the proportional application of the guidelines on a group-wide basis.

“With reference to shares and share-linked and other alternative instruments as part of variable remuneration, Cebs has given further guidance on the features required to accept alternative instruments as part of variable remuneration.

“Cebs will monitor the regulatory and market developments regarding such alternative instruments and will, if needed, provide further guidance on the use of these instruments.

“Finally, in response to the concerns about retention periods, Cebs’s guidelines have further emphasised the difference between deferral and retention periods and have added some further proportionality for retention periods of deferred instruments.”

The final guidelines apply from 1 January 2011.

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