Response to consultation Paper on draft Guidelines on the data collection exercise regarding high earners
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Otherwise the information to be submitted is clear.
The deadline of 30 June each year is too early, as it interferes with other processes related to remuneration, and should be moved to at least 31 October of each year.
We would recommend that the data is reported on the pay-out-basis (i.e. remuneration actually paid during the year of reporting) and not on the award basis (i.e. remuneration earned during the year of reporting) as it is currently proposed in point 3.3. This approach would in our view contribute to ensuring unified interpretation of the data requested, as illustrated in the below example:
Some institutions do not have rolling multi-year remuneration programs, which means that they use long term incentive plans which start every few years. The following example is based on a 3-year incentive programme. The remuneration is awarded at the end of the 3-year accrual period, i.e. every three years. However, it is paid out in three installments over the next three years (Year 4-5-6). Reporting on remuneration awarded rather than on remuneration paid out would distort the picture, since the amounts reported for year 3 would be exceptionally high, and for other years exceptionally low. In order to ensure high quality of the data gathered, we strongly suggest considering the option of reporting remuneration on paid-out-basis.
We note that the rows in the Annex 1 somewhat differ from those of Annex 2 of the remuneration benchmarking exercise. We propose that these templates are kept identical. For example, row considering “Article 450 h(iii)CRR – total amount of outstanding deferred variable remuneration awarded in previous periods and not in year N (in EUR)” is not included in the high earners Annex 1 template, but is found in Annex 2 of the total remuneration benchmarking data collection.
We also note that the data collection process does not have any value added features for the institutions themselves. We propose to develop the processes in closer cooperation with the institutions in the future to better incorporate the data collection exercises with the institutions' remuneration planning, and thus becoming a mutually beneficial exercises, for both supervisors and institutions.
Q2: Is the information to be submitted to the EBA sufficiently clear?
Numbers in example given in point 2.9 are incorrect, and this illustration is insufficient to determine the expected level of detail. We would encourage to correct and clarify all numerical examples throughout the document.Otherwise the information to be submitted is clear.
Q4: Are the reporting period and the specific amounts to be reported sufficiently clear?
We believe that annual collection of data is of sufficient frequency.The deadline of 30 June each year is too early, as it interferes with other processes related to remuneration, and should be moved to at least 31 October of each year.
We would recommend that the data is reported on the pay-out-basis (i.e. remuneration actually paid during the year of reporting) and not on the award basis (i.e. remuneration earned during the year of reporting) as it is currently proposed in point 3.3. This approach would in our view contribute to ensuring unified interpretation of the data requested, as illustrated in the below example:
Some institutions do not have rolling multi-year remuneration programs, which means that they use long term incentive plans which start every few years. The following example is based on a 3-year incentive programme. The remuneration is awarded at the end of the 3-year accrual period, i.e. every three years. However, it is paid out in three installments over the next three years (Year 4-5-6). Reporting on remuneration awarded rather than on remuneration paid out would distort the picture, since the amounts reported for year 3 would be exceptionally high, and for other years exceptionally low. In order to ensure high quality of the data gathered, we strongly suggest considering the option of reporting remuneration on paid-out-basis.
We note that the rows in the Annex 1 somewhat differ from those of Annex 2 of the remuneration benchmarking exercise. We propose that these templates are kept identical. For example, row considering “Article 450 h(iii)CRR – total amount of outstanding deferred variable remuneration awarded in previous periods and not in year N (in EUR)” is not included in the high earners Annex 1 template, but is found in Annex 2 of the total remuneration benchmarking data collection.
Q6: Do you agree with our analysis of the impact of the proposals in this Consultation Paper? If not, can you provide any evidence or data that would explain why you disagree or might further inform our analysis of the likely impacts of the proposals?
We can to a certain degree agree with the analysis. However, we would like to underline that the increased granularity of the data collected significantly increases costs of the data collection process for each institution.We also note that the data collection process does not have any value added features for the institutions themselves. We propose to develop the processes in closer cooperation with the institutions in the future to better incorporate the data collection exercises with the institutions' remuneration planning, and thus becoming a mutually beneficial exercises, for both supervisors and institutions.