EBA consults on draft Guidelines on remuneration and gender pay gap benchmarking exercise for banks and investment firms

The European Banking Authority (EBA) launched today a consultation to update its Guidelines on the remuneration benchmarking exercise under the Capital Requirements Directive (CRD), which was originally published in 2012 and updated in 2014. The review integrates additional requirements introduced by CRD V regarding the application of derogations to the requirement to pay out a part of variable remuneration in instruments and under deferral arrangements and the benchmarking of the gender pay gap. In addition, the review also includes guidance on how to harmonise the benchmarking of approvals granted by shareholders to use higher ratios than 100% between the variable and fixed remuneration. A separate and specific set of Guidelines is provided for investment firms under Investment Firms Directive (IFD). The consultation runs until 21 March 2022.

The additional revisions to the Guidelines for institutions and the new Guidelines for investment firms reflect the changes made to remuneration and disclosure requirements as well as the new remuneration framework for investment firms. The approach taken in the draft Guidelines for investment firms is consistent with the corresponding Guidelines for banks.

The templates for the data collection have been revised, taking also into account the European Commission’s Implementing Regulation on disclosures. Additional information is collected on the application of the derogations to the application of the requirements to pay out parts of the variable remuneration in instruments and under deferral arrangements.

The principle of equal pay for equal work or work of equal value and measures to ensure equal opportunities have already been included in the EBA Guidelines on sound remuneration policies and internal governance. The benchmarking of the gender pay gap will allow competent authorities to monitor the implementation of such measures and their development at different levels of pay. The Guidelines aim at ensuring that the benchmarking of the gender pay gap covers a representative sample of institutions. Specific templates for the benchmarking of the gender pay gap have also been introduced.

Consultation process

Comments to this consultation can be sent to the EBA by clicking on the "send your comments" button on the consultation page. Please note that the deadline for the submission of comments is 21 March 2022. All received contributions will be published at the end of the consultation, unless requested otherwise.

A public hearing on the draft Guidelines on the remuneration and gender pay benchmarking exercises as well as on the draft Guidelines on the data collection exercise on high earners (which are being consulted on in parallel) will take place via conference call on 17 February 2022 from 14:00 to 15:30 CET.

Legal basis and next steps

These Guidelines have been drafted in accordance with Articles 75(1) and 94(1) of Directive 213/36/EU and Article 34 (1) of Directive (EU) 2019/2034, which mandate the EBA to benchmark remuneration trends and practices and the gender pay gap and to publish information on approved higher ratios between the variable and fixed remuneration within banks on an aggregate basis for each Member State.

The new reporting format is expected to apply for the collection of data in 2023 for the financial year 2022. For the gender pay gap, the first data collection will concern the reference year 2023.