2.2 Shareholders’ involvement

Depending on the investment firm’s legal form and on the applicable national law, the approval of an investment firm’s remuneration policy and, where appropriate, decisions relating to the remuneration of members of the management body and other identified staff may also be assigned to the shareholders’ meeting in accordance with national company law¹⁴ . The shareholders’ vote may be either consultative or binding.

¹⁴ See also Shareholders Rights Directive 2007/36, as amended by Directive 2017/828, Articles 9a and 9b.

Where the approval of the remuneration of individual members of the management body and other identified staff is assigned to shareholders, shareholders should approve all components of remuneration, including severance payments. Where the approval of the remuneration policy is subject to approval by the shareholders, they should also either approve ex ante the maximum amount of the payments that can be awarded to the management body and other identified staff in the event of early termination of a contract or criteria for the determination of such amounts.

In order that shareholders can make informed decisions in line with paragraphs 43 and 44, the supervisory function should ensure that the investment firm provides them with adequate information regarding the remuneration policy designed to help them to assess the incentive structure and the extent to which risk taking is being incentivised and controlled as well as the overall cost of the remuneration structure. Such information should be provided well in advance of the relevant shareholders’ meeting. Detailed information on remuneration policies and on their modifications, on procedures and decision-making processes to set a remuneration package should be provided and include the following:

• a. the remuneration components;
• b. main characteristics and objectives of the remuneration packages and their alignment with the business and risk strategy, including the risk appetite and corporate values of the investment firm;
• c. how it is ensured that the remuneration policy is gender neutral;
• d. how the points under (b) are taken into account in ex ante/ex post adjustments, in particular for identified staff.

The supervisory function remains responsible for the proposals submitted to the shareholders’ meeting, as well as for the actual implementation and oversight of any changes to the remuneration policies and practices.