The European Banking Authority (EBA) published today additional information on the application of the proportionality principle to the remuneration provisions laid down in the Capital Requirements Directive in response to a request for advice from the European Commission.
The additional information included in today’s Report is a follow-up to the Opinion on the application of proportionality , issued in December 2015, where the EBA called for a harmonised and consistent on the proportionate application of remuneration requirements across the European Union (EU) taking into account the compliance costs. In particular, the Opinion recommended that the CRD be amended to allow for waivers regarding the application of deferral arrangements and the pay out in instruments for small and non-complex institutions and for identified staff that receive only a low amount of variable remuneration when specific criteria are met.
The present Report provides a detailed overview by Member State on the applicable framework regarding the principle of proportionality, analyses the number of institutions and staff currently benefitting from waivers in the area of remuneration and provides estimates on the number of institutions and staff that could benefit from future waivers if the amendment proposed by the ЕВА in its Opinion were to be adopted.
Estimates of the effect of potential waivers have been calculated for three different thresholds set at EUR 1.5bn, 5.0bn, and 10.0bn of the total balance sheet of each credit institution. While the effect of waivers differs by Member State, in total, depending on the threshold, around 75% to 90% of all EU credit institutions, representing 3% to 15% of the aggregated total balance sheet of all credit institutions and 35% to 60% of their identified staff would benefit from waivers. This would be in addition to the staff that could benefit from waivers based on low levels of remuneration.
The EBA statement and related information can be found here.