According to the definition included in the EBA Guidelines on sound remuneration policies under CRD, EBA/GL/2021/04 (“EBA Guidelines”), Routine employment packages mean, for example, “…proportionate regular pension contributions on top of the mandatory regime”. 

Banks fairly often grant supplementary pension benefits to top management. The value of the supplementary pension benefit is often substantial, for example amounting to more than 30% of the total annual remuneration of the beneficiary.

Some banks have taken the position that such substantial pension benefits granted to the Chief Executive Officer and/or the Deputy Chief Executive Officer are to be considered proportionate regular pension contributions on top of the mandatory regime and should therefore be considered routine employment packages within the meaning of the EBA Guidelines. Consequently, these institutions have classified such benefits as fixed remuneration. However, some banks have adopted a different view and do not consider such pension benefits to be proportionate, due to the substantial value of the benefit in relation to the beneficiary’s total yearly remuneration. These banks have categorized such benefits as variable remuneration.

In seeking to resolve the matter on its own behalf, the submitter has relied on opinions from external legal experts. These opinions have reached differing conclusions on the issue. 

The submitter considers the matter to be of relevance due to the divergent interpretations adopted by different banks and different legal experts. It is therefore deemed essential to obtain a correct and authoritative interpretation of the issue.