EBA欧洲银行-EBA-Op-2016-0528Report-on-Benchmarking-of-Remuneration-and-High-Earners-201429_88页_3mb

EBA Report Summary: Benchmarking of Remuneration Practices at the European Union Level and Data on High Earners (Data as of End 2014)

Core Content

The European Banking Authority (EBA) conducted a remuneration benchmarking exercise in 2014 based on data collected from credit institutions and investment firms across the European Union (EU). This report provides an overview of remuneration practices, focusing on high earners (those earning EUR 1 million or more annually) and identified staff (those with a material impact on the institution's risk profile). The analysis compares 2013 and 2014 data and includes insights on the application of regulatory technical standards (RTS) and the bonus cap introduced under Directive 2013/36/EU (CRD IV).

Main Findings

1. Increase in High Earners

• The number of high earners increased significantly from 3,178 in 2013 to 3,865 in 2014 (+21.6%).
• This increase is mainly due to the EUR-GBP exchange rate fluctuations, which boosted the income of staff paid in GBP when converted to EUR.
• The UK had the largest number of high earners in 2014, with 2,926 high earners, an increase of +40.27% from 2013.
• Germany saw a reduction in high earners, from 397 in 2013 to 242 in 2014, primarily due to a decline in high earners from UK subsidiaries and branches in Germany.

2. Overlap Between High Earners and Identified Staff

• 87% of high earners in 2014 were identified staff, up from 59% in 2013.
• The increase is attributed to the application of the RTS on identified staff in 2014, which expanded the criteria for identifying staff with a material risk impact.
• The higher overlap supports the expected functioning of the regulation, aligning high earners more closely with risk-sensitive roles.

3. Impact of the Bonus Cap

• The bonus cap, limiting the variable-to-fixed remuneration ratio to 100% (200% with shareholder approval), led to a significant decrease in the average variable-to-fixed remuneration ratio for identified staff from 104.27% in 2013 to 65.48% in 2014.
• In many cases, variable remuneration for all staff roughly equals half of the amount paid out to shareholders.

4. Identified Staff Growth

• The number of identified staff increased from 34,060 in 2013 to 62,787 in 2014 (+84.34%).
• In 2014, 2.34% of all staff were identified, compared to 1.17% in 2013.

5. Remuneration Composition

• Fixed remuneration for identified staff in 2014 was EUR 11,659,016,123, up from EUR 5,795,794,360 in 2013.
• Variable remuneration for identified staff was EUR 7,634,227,752 in 2014, compared to EUR 6,043,294,697 in 2013.
• Total remuneration for identified staff reached EUR 19,293,243,875 in 2014, up from EUR 11,839,089,057 in 2013.

6. Cost Flexibility and Own Funds

• The increase in fixed remuneration for identified staff is not material compared to overall administrative costs.
• In most institutions, fixed remuneration for identified staff remains below 5% of administrative costs.
• The new remuneration structures do not reduce cost flexibility, and even in adverse scenarios, the fixed remuneration levels do not significantly impact own funds.

7. Variable Remuneration Deferral and Payout

• The percentage of variable remuneration deferred and paid out in instruments increased slightly.
• Fixed remuneration was also paid out in instruments for the first time in 2014, likely due to the inclusion of role-based allowances under fixed remuneration.
• The EBA Opinion on allowances, published in 2015, is expected to change this practice, as many allowances do not meet the criteria for fixed remuneration.

8. Regulatory and Supervisory Context

• Under Article 75(1) of CRD IV, competent authorities are required to benchmark remuneration trends and submit data to the EBA.
• The bonus cap and RTS on identified staff are key regulatory instruments influencing remuneration structures.
• The EBA is involved in the European Commission's review of remuneration provisions under Article 161(2) of CRD IV.

Key Aspects of the Report

• Data Collection: Conducted annually at the highest EU consolidation level, covering all subsidiaries and branches. At least 60% of the banking system (by total assets) must be covered in each Member State.
• Scope: Excludes staff predominantly active in third countries. Data are collected separately for each Member State.
• Analysis Focus: Includes trends in remuneration, performance and cost flexibility, deferral and payout in instruments, and specific variable remuneration elements such as ex post risk adjustments, guaranteed variable remuneration, and severance payments.
• Methodology: Uses statistical approximations and aggregate data to ensure consistency across Member States.

Conclusion

The EBA continues to benchmark remuneration trends and monitor new developments in this area. The bonus cap and RTS on identified staff have had a measurable impact on remuneration structures, particularly in the UK, where the EUR-GBP exchange rate played a significant role in increasing the number of high earners. The higher overlap between high earners and identified staff suggests better alignment with risk-sensitive roles. The EBA will ensure consistent application of exclusions and will continue to review and update remuneration guidelines.

Main Figures from the Remuneration Benchmarking Exercise