EBA updates on remuneration practices and high earners data for 2013 across the EU

The European Banking Authority (EBA) published today a report combining the benchmarking of remuneration practices across the European Union and aggregated data on the remuneration of EU institutions' staff who received, in total, EUR one million or more in 2013. The analysis focuses, in particular, on the identification of staff, the application of deferral arrangements and the pay out in instruments, as well as on the use of specific remuneration elements, such as guaranteed variable remuneration and severance payments. The report shows that the number of high earners slightly decreased since 2012 and that the ratio between the variable and fixed remuneration paid to identified staff was further reduced in 2013. This report is part of the EBA's work on institutions' staff remuneration policies aimed at ensuring prudent and sustainable risk taking in the EU banking sector.

 

In particular, the report shows that the number of high earners decreased from 3 530 staff in 2012 to 3 178 staff in 2013 and that the percentage of high earners having a material impact on an institution's risk profile, ‘identified staff', has slightly increased over time from 53.68% in 2012 to 59.00% in 2013. Nevertheless, the level of 'identified staff' differs significantly across similar institutions. This trend is likely to change in the future following the adoption, in 2014, of the Regulatory Technical Standard (RTS) on identified staff.

 

In addition, the report highlights that remuneration practices within institutions were not sufficiently harmonised. In particular, the application of deferral and pay-out in instruments differed significantly across Member States and institutions. 

 

Overall, it can be also observed that the ratio between the variable and fixed remuneration paid to identified staff was further reduced in 2013 and is now around 104% although in many business areas and institutions this ratio is above the bonus cap that applies for performance year 2014 and onwards. This is likely to further decrease following the entry into force of the Capital Requirements Directive (CRDIV) in 2014, which introduced the so called ‘bonus cap', thus limiting the ratio of the variable and the fixed component of remuneration to 100% (200% if approved by the shareholders). 

 

This report will be updated on an annual basis and the analysis based on 2014 figures is expected to be released by the end of 2015. The forthcoming report will show the full impact on institutions of both the RTS on identified staff as well as of the application of the "bonus cap", as the latter applies for remuneration awarded for the performance year 2014 and onwards.

This report has been developed in line with paragraphs (1) and (3) of Article 75 of Directive 2013/36/EC (CRD IV), which mandates the EBA to use the data disclosed by institutions to benchmark remuneration trends and practices and to collect information on the number of individuals per institution that are remunerated EUR one million or more per financial year (high earners) in pay brackets EUR one million, including the business area involved and the main elements of salary, bonus, long-term award and pension contribution.