20 April 2009
The Committee of European Banking Supervisors (CEBS) today publishes a finalised set of principles for remuneration policies following a one-month public consultation period and a public hearing. The principles address key aspects of well functioning remuneration policies and thus support the sound operation of banking institutions.
The scope of the principles covers remuneration policies applying throughout an organisation rather than focusing exclusively on executive pay or severance pay. It focuses on key aspects of remuneration policies, and in particular:
- alignment of company and individual objectives;
- transparency towards internal and external stakeholders;
- governance with respect to oversight and decision-making;
- performance measurement; and
- forms of remuneration.
Implementation of these guidelines by the institutions is expected to take place by the end of Q3 2009 in order for supervisors to make a first assessment of the institutions' progress in transposing the principles.
In drafting the guidelines, CEBS has cooperated closely with other bodies working on remuneration, in particular the FSF and CESR.
CEBS will further consider implementation aspects of these guidelines in a Pillar 2 context in the coming months. The principles will be integrated into the section on Internal Governance of the CEBS Guidelines on the Application of the Supervisory Review Process under Pillar 2 (GL03), originally published on 25 January 2006) .