2013年-FSB全球金融稳定委员会_Second_progress_report_on_compensation_practices_44页_643kb

Summary of the FSB Second Progress Report on Sound Compensation Practices

Core Content

This report is the second progress report on the implementation of the FSB Principles for Sound Compensation Practices (P&S) and their Implementation Standards. It highlights the progress made by FSB member jurisdictions and financial institutions in aligning compensation with prudent risk-taking, as well as the remaining challenges and areas for further action.

Main Findings

1. National Implementation Status

• All FSB jurisdictions except Argentina and Indonesia have completed the implementation of the P&S in their national regulation or supervisory guidance.
• Indonesia has introduced corporate governance regulations that cover elements of the P&S and require banks to submit remuneration data. While not explicitly focused on risk alignment, major banks have integrated risk management into their remuneration systems through key performance indicators, malus, and clawback clauses.
• Argentina still has legal restrictions on certain P&S standards (5-10, 12, 14), but authorities report no significant issues in the domestic banking system regarding compensation and risk-taking.
• Some countries (Brazil, China, India, Turkey) have not implemented all P&S related to risk alignment due to non-applicability or domestic constraints.

2. Regulatory Initiatives

• CRD IV (Capital Requirements Directive IV) has been adopted by the EU, introducing more detailed remuneration requirements than the P&S. These include:
  • A cap on variable remuneration for Material Risk Takers (MRTs), not exceeding 100% of the fixed component.
  • An option for member states to allow up to 200% of the fixed component, provided by a qualified majority of shareholders.
  • Encouragement of deferred and bail-in-able instruments for variable remuneration.
• China has issued regulations on compensation reform for state-owned enterprises and clarified disclosure requirements.
• Hong Kong updated its Banking Disclosure Rules to require transparency on remuneration compliance.
• South Africa introduced detailed disclosure requirements for remuneration policies in Basel III.
• Korea expanded the application of the P&S to larger financial investment companies.
• Mexico extended remuneration rules to investment advisors and brokerage houses.
• United States introduced Dodd-Frank-related rules on compensation disclosure and listing standards.

3. Supervisory Oversight

• Most FSB jurisdictions have intensified their supervision of compensation practices, with ongoing supervisory plans that include oversight of remuneration structures.
• Supervisors report that they now have a good understanding of pay practices in their markets and are actively engaging with firms to influence compensation structures.
• Annex A provides an update on national implementation status, while Annex B outlines remaining gaps.

4. Trends in Compensation Practices

• Firms have revised compensation structures in line with the P&S, including:
  • Increased use of deferred pay and longer deferral periods.
  • Greater reliance on equity-based compensation.
  • Implementation of maluses for both financial performance and compliance issues.
• Disclosure of remuneration practices has improved, with most supervised firms now providing detailed information in annual reports.
• Stakeholder engagement, especially from shareholders, has increased, prompting firms to be more responsive to compensation-related concerns.

5. Challenges and Concerns

• Alignment with Ex Ante and Ex Post Risk remains a challenge, as firms continue to experiment with different approaches.
• Identification of MRTs is still inconsistent across jurisdictions, leading to calls for more harmonized criteria.
• Level Playing Field Concerns exist, particularly regarding the EU's prescriptive approach to variable remuneration, which may limit firms' ability to implement a global compensation strategy.
• Proportionality and flexibility are important considerations, especially for smaller or non-listed institutions.

Key Recommendations

1. National Implementation of the P&S

• Jurisdictions that have not yet implemented the P&S should do so promptly.
• Those that have not implemented certain standards due to non-applicability or incompatibility should regularly review their frameworks to prevent regulatory arbitrage and ensure consistency.

2. Material Risk Takers (MRTs)

• The FSB will survey and compare practices across jurisdictions to identify good practices and promote proportionality.
• The EBA is tasked with drafting technical standards to harmonize the identification of MRTs and the types of instruments suitable for variable remuneration.

3. Addressing Remaining Challenges and Assessing Effectiveness

• The FSB will continue to monitor implementation and promote best practices, particularly in areas such as malus and clawback arrangements.
• A workshop is planned by year-end to discuss trends and challenges, encouraging experience sharing among supervisors and firms.

Conclusion

While significant progress has been made in implementing the P&S, challenges remain in ensuring consistent and effective alignment of compensation with prudent risk-taking. The report emphasizes the need for ongoing monitoring, dialogue, and harmonization to address these challenges and improve the sustainability of compensation reforms.