EBA欧洲银行-EBA-Remuneration-benchmarking-report-2010-to-2012_30页_1mb

Summary of EBA Report: Benchmarking of Remuneration Practices at Union Level

Core Content

The European Banking Authority (EBA) conducted a benchmarking analysis of remuneration practices across the European Union and EEA, based on data collected from 2010 to 2012. The analysis was mandated by Directive 2013/36/EU (CRD IV) and its predecessor, Directive 2006/48/EC (CRD III). The EBA's objective was to assess the alignment of remuneration practices with regulatory requirements, particularly focusing on variable remuneration, deferral arrangements, and the identification of staff with a material impact on the risk profile of institutions.

The EBA also issued guidelines to standardize data collection and ensure transparency in remuneration practices. These guidelines were updated in 2014 to align with the new requirements introduced by CRD IV, including a cap on variable remuneration for identified staff (100% with shareholder approval).

Main Viewpoints

• Legal Basis:
  The remuneration requirements under CRD III and IV apply to staff whose activities have a material impact on an institution's risk profile (identified staff). These requirements include:

  • A ratio of variable to fixed remuneration (with a cap of 100% for 2014 and onwards).
  • At least 50% of variable remuneration to be paid in non-cash instruments.
  • At least 40% of variable remuneration to be deferred (60% if a particularly high amount is awarded).

• Data Collection:

  • The EBA received data from 137 groups for 2012, 124 for 2011, and 113 for 2010.
  • Data was collected at the highest level of consolidation (EEA level) and includes all staff within the scope of consolidation, including non-banking activities.
  • Some Member States only submitted data from 2011 onwards, and not all countries provided data on a country-by-country basis.

• Benchmarking Sample:

  • The sample covers 60% of the banking system in terms of total assets.
  • The number of identified staff increased from 28,221 in 2010 to 35,996 in 2012.
  • The overall ratio of identified staff to all staff increased from 0.97% in 2010 to 1.20% in 2012.

Key Findings

• Remuneration Trends:

  • Fixed remuneration for identified staff increased over time, while variable remuneration decreased, especially in 2011 and 2012.
  • The average variable/fixed remuneration ratio dropped from 204.76% in 2010 to 108.74% in 2012.
  • The average net profit per staff member fluctuated significantly: EUR 16,722 in 2010, EUR -1,146 in 2011, and EUR 29,784 in 2012.

• High Earners:

  • High earners are defined as staff earning more than EUR 1,000,000 per year.
  • In 2012, there were 3,530 high earners across the Union.
  • Approximately 53.68% of high earners were identified as having a material impact on risk.
  • The percentage of high earners in the UK was significantly higher than in other Member States.

• Deferred Variable Remuneration:

  • The percentage of variable remuneration deferred increased in 2012 compared to 2010.
  • However, many institutions only met the minimum deferral requirements (40%), and some even fell below this threshold.
  • The EBA observed that deferral rates varied across institutions and business lines, indicating inconsistent application of remuneration policies.

• Specific Remuneration Elements:

  • Ex-post risk adjustments, guaranteed variable remuneration, and severance payments were analyzed.
  • The median amount of guaranteed variable remuneration was EUR 26,000.
  • Severance payments averaged EUR 40,000, with the number of recipients varying across business lines.
  • Discretionary pension benefits were also assessed, with the median amount awarded being EUR 10,000.

• Business Line Analysis:

  • Investment banking had the highest percentage of identified staff, followed by asset management.
  • The ratio of identified staff to total staff was significantly higher in smaller institutions than in larger ones.
  • The EBA highlighted that the identification of staff is not uniform across institutions, even those with similar business models.

Regulatory Implications

• The EBA is conducting further analysis on the use of 'allowances' as a means to circumvent the bonus cap.
• The EBA has been instructed by the European Commission to investigate whether remuneration schemes comply with Union law.
• The EBA will continue to publish annual benchmarking reports and update its guidelines to ensure consistency and compliance with CRD IV.

Conclusion

The EBA's benchmarking exercise reveals that remuneration practices across the Union have not been sufficiently harmonized under CRD III. While the overall trend shows a reduction in variable remuneration and an increase in fixed remuneration, the deferral rates and identification of risk-takers remain inconsistent. The introduction of CRD IV is expected to bring more uniformity, particularly with the cap on variable remuneration for identified staff. The EBA continues to monitor and report on these developments to ensure regulatory compliance and transparency.