2.4.1 Composition of the remuneration committee

55.The remuneration committee should be composed of members of the supervisory function¹⁹ who do not perform executive functions. In G-SIIs and O-SIIs, the remuneration committee should include a majority of members who are independent and be chaired by an independent member. In other significant institutions, determined by competent authorities or national law, the remuneration committee should include a sufficient number of members who are independent²⁰ . If employee representation on the management body is provided for by national law, it must include one or more employee representatives.

56.Members of the remuneration committee should have collectively appropriate knowledge, expertise and professional experience concerning remuneration policies and practices, risk management and control activities, namely with regard to the mechanism for aligning the remuneration structure to institutions ’ risk and capital profiles.

¹⁹ Different management body structures can be observed in European countries. In some countries, a unitary structure is common, i.e. supervisory and management functions of the board are exercised by only one body. In other countries, a dual structure is common, with two independent bodies being established, one for the management function and the other for the supervision of the management function. In these cases, the remuneration committee should comprise members of the supervisory body.

²⁰ Independence as set out in the EBA guidelines on internal governance and see also the joint EBA-ESMA guidelines on the assessment of the suitability of members of the management body and key function holders.

1. Overview

1.1 References

1.2 Identified Requirements

1.3 Related Standards

2. Identified Requirements

3. Related Standards

• EBA - Published by the European Banking Authority at https://www.eba.europa.eu/