We would like to emphasize that the gender pay gap definition does not take into account the type of work, nor does it include the level of responsibility or the experience etc. As such calculating a gender pay gap does not meet the purpose of gender-neutral remuneration policies.
Additionally, given the term “earnings” is not defined in the Guidelines, we would suggest replacing it by “remuneration”. Also, as “hourly” is not a common practice in the financial/banking industry, we would suggest switching with “full time annual remuneration awarded” in order to be consistent with paragraph 25.
Considering the definition of severance payments, we believe the concept of “early termination of a contract” could be clarified as the guidelines are not entirely clear to that regard. We would suggest the notion of “early” to be interpreted as (i) a contract with a predefined period (e.g. temporary contracts) terminated before its end-date and (ii) indefinite contracts terminated before the risk taker reaches legal retirement.
On this topic, we consider the EBA draft Guidelines go further than what is explicitly stated in IFD. They significantly broaden the scope of gender-neutral remuneration policies by including issues related to gender equality policies (e.g. career development, succession plans). Besides, given the scope and primary purpose of IFD we consider this Guidelines are not necessarily the most appropriate legislative vehicle to tackle in the most efficient way such an important issue.
We consider that the reference to “all related employment conditions that have an impact on the pay per unit of measurement or time rate should be gender neutral” goes beyond gender neutral remuneration policies and therefore should be deleted.
Besides, we would also suggest deleting the second sentence of paragraph 23 as not only does it broaden the scope of policies but also because it is not in line with the definition of “gender neutral remuneration policies”.
We would suggest using “working time arrangements” as unit of measurement as it is simpler and clearer than “the remuneration awarded”.
Rather than documenting a job description, we would recommend focusing on categories of job positions while respecting the principle of proportionality to avoid heavy constraints as it would not have a detrimental impact on the monitoring.
We recommend adding an item on “specific skills or competence of staff”.
Besides, point h) only concerns children excluding other family responsibilities, we would therefore suggest the following wording: “h) appropriate benefits, including the payment of additional voluntary household and other allowances to staff with dependent family members (e.g. children, other closed relatives).
We call on the EBA to clarify this paragraph as specific remuneration requirements always have to be taken into account and are independent of gender neutrality provisions.
We propose to delete the reference to a specific exchange rate to convert in EUR or to stress that the rate which should be used should be part of the entities remuneration policy before each yearly exercise is launched. By doing so it would avoid creating confusion for subsidiaries using the exchange rate established by each entity when reporting the remuneration information of their executives. Besides, we understand the existing system with exchange rates has worked well so far and we do not think it is worth establishing a specific exchange rate in these Guidelines.
We would like to EBA to clarify the meaning of “additional payments” as well as the specific inclusion of “member of the management body”.
First of all, with regards to “additional payments” necessarily considered as “normal variable remuneration”, we consider that “any” additional payments in the context of the termination of the mandate of a board member should not be considered as variable remuneration. Obliging investment firms to apply variable remuneration rules to any payment made after termination if these remunerations comply with all requirements in the guidelines does not clarify the severance payment regime.
We therefore consider that paragraphs 157 to 162 are sufficiently clear with regards to the rules that should apply to severance payments.
Additionally, we recommend deleting the reference to “member of the management body” as compliance with the Guidelines would be made difficult given non-executive members of the management body have a remuneration structure that is different to more “traditional” risk takers and which do not operate on a contractual basis.
We would also suggest for the EBA not to refer to “regular end” of “a contractual period” as it would result in a new unregulated concept, different than “early” termination. Also, it is an issue in jurisdictions where indefinite contracts are widely used where contracts rarely have a “regular end”. The Guidelines would benefit in the EBA clarifying what it means by “regular end”.
We would recommend amending point e) as a court ruling would be necessary for each case which is not workable. Our proposed wording would avoid reducing the efficiency as a means to avoid judicial disputes:
“e. The investment firm and a staff member agree on a settlement in case of a potential or an actual labour dispute that could potentially bring an action in front of a court lead to a court ruling, to avoid a decision on a settlement by the courts”.
It should also be amended as it considers transactional severance as a variable which should be integrated in the ratio and differed.
We also ask the EBA to clarify why non-competition clauses have been included separately from other severance payments. We wonder why the EBA does not include the comprehensive list of payments for which ratio, deferral and pay out instruments as well as the severance payments for which ratio, deferral and pay out instruments is not mandatory in points b. (i).