2.3.2 Role of the remuneration committee

The remuneration committee should:

• a. be responsible for the preparation of decisions on remuneration to be taken by the supervisory function, in particular regarding the remuneration of the members of the management body in its management function as well as of other identified staff;
• b. provide its support and advice to the supervisory function on the design of the investment firm’s remuneration policy, including that such remuneration policy is gender neutral and supports the equal treatment of staff of different genders;
• c. support the supervisory function in overseeing the remuneration policies, practices and processes and the compliance with the remuneration policy and the requirement for the remuneration policy to be gender neutral;
• d. check whether the existing remuneration policy is still up to date and, if necessary, make proposals for changes;
• e. review the appointment of external remuneration consultants that the supervisory function may decide to engage for advice or support;
• f. ensure the adequacy of the information provided to shareholders on remuneration policies and practices;
• g. assess the mechanisms and systems adopted to ensure that the remuneration system properly takes into account all types of risks, liquidity and capital levels and that the overall remuneration policy is gender neutral, is consistent with and promotes sound and effective risk management and is in line with the business strategy, objectives, corporate culture and values, risk culture and the long-term interest of the investment firm;
• h. assess the achievement of performance targets and the need for ex post risk adjustment, including the application of malus and clawback arrangements;
• i. review a number of possible scenarios to test how the remuneration policies and practices react to external and internal events, and back-test the criteria used for determining the award and the ex ante risk adjustment based on the actual risk outcomes.

Where the investment firm has established a remuneration committee, the remuneration of the senior officers in the compliance functions, and the risk management, audit functions where established, should be directly overseen by the remuneration committee. The same applies to staff who are entrusted with the performance of risk management procedures, where no risk management function has been established. The remuneration committee should make recommendations to the supervisory function on the design of the remuneration package and amounts of remuneration to be paid to the senior staff members in the control functions.