6
Remuneration Policies
6.1
In this Chapter, 6.2, 6.5 and 6.6 apply to firms in relation to firms’ remuneration policies, practices and procedures generally, not only in relation to material risk takers.
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6.2
A firm must establish implement and maintain a remuneration policy, practices and procedures which are consistent with and promote sound and effective risk management and do not encourage risk-taking that exceeds the level of tolerated risk of the firm.
[Note: Arts. 74(1) and 92(2)(a) of the CRD]
[Note: CRD]
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6.3
A firm must ensure that its remuneration policy is in line with the business strategy, objectives, values and long-term interests of the firm.
[Note: Art. 92(2)(b) of the CRD]
[Note: CRD]
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6.4
A firm must ensure that its remuneration policy includes measures to avoid conflicts of interest.
[Note: Art. 92(2)(b) of the CRD]
[Note: CRD]
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6.5
A firm must ensure that its remuneration policies, practices and procedures, including performance appraisal processes and decisions, are clear and documented.
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6.6
A firm must ensure that its remuneration policy sets out the reference year for the variable remuneration that it takes into account when calculating total remuneration and that reference year must be either:
- (1) the year preceding the financial year in which the variable remuneration is awarded; or
- (2) the year preceding the financial year for which the variable remuneration is awarded.
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