Response to consultation on draft guidelines on the applicable notional discount rate for variable remuneration
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Q 9-11: It would further be preferred also having examples assumed a maximum ratio between variable and fixed remuneration above 100%, e.g. at 200%.
Is the example 2 sufficiently clear and helpful to understand the application of the guidelines?
There are confusing assumptions made in this example, where e.g. figure 2 shows no retention on non-deferred variable remuneration. Furthermore the present value formula is not general, but applies when the ratio is 100% (not e.g. 200%). Further, longer deferral periods are not favoured in the pro-rata model where discounted variable remuneration does not necessarily decrease with the deferral length (is rather a U-curve).Is the example 3 sufficiently clear and helpful to understand the application of the guidelines?
YesQ 9-11: It would further be preferred also having examples assumed a maximum ratio between variable and fixed remuneration above 100%, e.g. at 200%.