In UNI Europa Finance’s (UEF) opinion, the concerned paragraphs are in general without problem. While UEF would like to a limitation of variable remuneration to a maximum of 100%, we recognise that is outside the scope of this consultation.
On the topic of increasing proportionality in the remuneration plans of banks, we support the initiative to reduce undue financial burdens for smaller actors and see the logic of having wavers for certain activities. We do however still call for these measures to be applied with caution, to avoid too uneven a playing field developing and for more risky behaviour to be imported into the smaller banks, with the added dangers that would pose for the local economy that relies on these banks.
On a general note, we would also like to express our appreciation for the amended article 72 (p. 46), which mentions that ‘Staff should be informed about the characteristics of their variable remuneration, as well as the process and criteria that will be used to assess the impact of their professional activities on the risk profile of the institution and their variable remuneration’. In our view, this will help greatly to improve transparency in terms of remuneration and help to break down unjust differences in remuneration.
The new obligation for a gender-neutral remuneration policy is very well appreciated by UEF. Since gender discrimination still unfortunately exists in today’s financial industry, any initiative to help eradicate this problem is very welcome from our side. We do have some concern though about the proposed criteria used to determine the value of work presented in paragraph 27. There is a new obligation in the review process of the remuneration policy (article 63) but also regulations for implementing such a policy. The criteria that institutions may consider in order to determine the value of work are outlined in article 27. It is not made entirely clear why those mentioned criteria are relevant to that assessment and they look somewhat arbitrary in their composition. UEF would therefore propose to more align these criteria with requirements previously put out by the Commission to assess what is equal value of work (see Commission Recommendation C(2014) 1405 final and the corresponding Annex SWD/2013/0512 final). It should also be noted, that we have been informed by our Swedish affiliates, that the current formulation of articles 26 and 27 would come into conflict with the current practice applicable in the country. There are currently both sectoral and local collective agreements in place in Sweden in the banking sector, which include requirements for gender neutrality to be enforced in questions of remuneration. By proposing the guidelines in their current form, without exceptions mentioned in cases where agreements have already been made on the topic of non-discrimination, there is a risk that a conflict could arise if formulations or elements of the proposed guidelines and the collective agreements on the ground do not match completely. Since the guidelines would require banks to comply or explain why they would deviate from the guidelines, especially foreign banks would potentially find themselves in a situation where they would be less willing to abide by local collective agreements in Sweden since the rest of their operations would be operating according to the guidelines. We would therefore encourage the inclusion of wording stating that in case local collective agreements, concluded by the social partners, already cover the topic of non-discrimination, exemption from the guidelines is allowed.
UEF finds the GL on requirements in a group context to be sufficiently clear, however, we would suggest including an amendment to article 73 (p. 46), stating that ‘These guidelines should be applied without prejudice to the rights of employee representatives under national legislation.’ This is to avoid conflicts in situations where there are already rules in place within the bank/sector/country, which encompass the topics being addressed by these GLs and which have been agreed upon by the relevant social partners, which would exempt them from having to implement EU rules that set lower requirements.
Due to Art. 94(3) CRD it is now possible to waive the obligation to defer parts of the variable renumeration and pay it in instruments in the case of being not a large institution defined as in the CRR or a staff member whose variable remuneration doesn’t exceed EUR 50k and doesn’t represent more than 1/3 of total remuneration. Additionally, member states can change the thresholds defined under certain circumstances. This is implemented in the guidelines.
Under section 4, UEF has two points we would like to raise for consideration.
1. The first one concerning para 94 d) of the GL stating that to calculate the 1/3 ratio between fixed and variable remuneration, the full amount including severance pay is to be counted. Given that severance pay in case of loss of job in many cases is more than 1/3 of fixed payments, this would lead to deferring the variable remuneration including the severance pay and paying it in instruments. UEF would therefore propose to amend the article 94 d, that adds „severance payments covered by article 170 are not counted for this purpose“.
2. The second point concerns article 293, which states that claw back is to be implemented also in cases of Art. 94(3) CRD. Again, this should only „cover payments which are not exempted under article 170“.
Yes this section is clear to us.
On the amendments made to section 9, UEF has two points it would like to raise for consideration.
1. The first one concerns, the amended article 170 (p. 71), where it mentions that severance pay shouldn’t be counted when calculating the ratio and the application of deferral and paying in instruments. To this, we would add, that is should even be applicable „when calculating the thresholds under Art 94(3) CRD“.
Additionally para 170 should be extended with an additional point, „c. severance payments which are part of an agreement between the institution and employees representatives under national law“.
2. The second point concerns the amended article 148, which states that discretionary pension benefits are not severance pay even if the employee decides to retire early. This closes the door to agreements about job losses which compensate losses in other pension schemes because of the early retirement and are not paid as a lump sum. This why we also in this case suggest an amendment with „This is not the case where pension benefits are part of agreements mentioned in para 170“.