Response to consultation Paper on draft Guidelines on the data collection exercise regarding high earners
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Numbers in example given in point 2.9 is incorrect, and insufficient in determining the level of detail required when reporting of the values. We propose that all numerical examples throughout the document are corrected and explicitly expressed.
The deadline of 30 June each year is too early, and interferes with other processes related to remuneration. The deadline is proposed to be postponed to 31 October each year, or later.
Clarification and clear examples on whether or not the data should be reported on the paid-basis (i.e. remuneration actually paid during the year of reporting) or on the earnings-basis (i.e. remuneration earned during the year of reporting) should be provided to ensure unified interpretation of the data requested.
We would like to highlight that reporting for multi-year accrual periods distorts the data for organizations, who do not have rolling multi-year remuneration programs, and thus end up reporting somewhat disproportionate levels of remuneration awarded every three-five years, depending on the length of the earnings period of long-term incentive plans. For example, should an organization run only one long-term incentive program at a time, with earnings period of three years (i.e. 2008-2010, 2011-2013, etc.), earnings-based reporting would lead to high levels of reported remuneration for years 2010 and 2013, and significantly lower reported earnings for years 2008, 2009, 2011, and 2012. We note that this method of collecting the data may affect its quality, and strongly suggest considering the option of reporting remuneration on paid-basis.
We note that the rows in the Annex 1 somewhat differ to those of Annex 2 of the remuneration benchmarking exercise. We propose that these templates are kept identical to ease the collection of the data. 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 adding features to the institutions themselves, and thus only serves the purposes of the authorities. 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 value adding exercises.
Q2: Is the information to be submitted to the EBA sufficiently clear?
The information to be submitted is sufficiently clear.Numbers in example given in point 2.9 is incorrect, and insufficient in determining the level of detail required when reporting of the values. We propose that all numerical examples throughout the document are corrected and explicitly expressed.
Q4: Are the reporting period and the specific amounts to be reported sufficiently clear?
Annual collection of data is of sufficient frequency.The deadline of 30 June each year is too early, and interferes with other processes related to remuneration. The deadline is proposed to be postponed to 31 October each year, or later.
Clarification and clear examples on whether or not the data should be reported on the paid-basis (i.e. remuneration actually paid during the year of reporting) or on the earnings-basis (i.e. remuneration earned during the year of reporting) should be provided to ensure unified interpretation of the data requested.
We would like to highlight that reporting for multi-year accrual periods distorts the data for organizations, who do not have rolling multi-year remuneration programs, and thus end up reporting somewhat disproportionate levels of remuneration awarded every three-five years, depending on the length of the earnings period of long-term incentive plans. For example, should an organization run only one long-term incentive program at a time, with earnings period of three years (i.e. 2008-2010, 2011-2013, etc.), earnings-based reporting would lead to high levels of reported remuneration for years 2010 and 2013, and significantly lower reported earnings for years 2008, 2009, 2011, and 2012. We note that this method of collecting the data may affect its quality, and strongly suggest considering the option of reporting remuneration on paid-basis.
We note that the rows in the Annex 1 somewhat differ to those of Annex 2 of the remuneration benchmarking exercise. We propose that these templates are kept identical to ease the collection of the data. 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 somewhat agree with the analysis, however, we note that the increased granularity of the data collected does significantly increase costs of the data collection, as it is likely to cause need for manual processing. Possible changes to information systems may also cause additional costs.We also note that the data collection process does not have any value adding features to the institutions themselves, and thus only serves the purposes of the authorities. 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 value adding exercises.