166. Severance payments should be considered as variable remuneration and as a general principle …

Severance payments should be considered as variable remuneration and as a general principle therefore, if awarded to identified staff, all requirements under Article 32 of Directive (EU) 2019/2034 apply. However, severance payments should in the following circumstances not be taken into account for the purpose of the calculation of the ratio between variable and fixed remuneration set within the remuneration policy and for the application of deferral and the pay out in instruments:

• a. severance payments mandatory under national labour law or mandatory following a decision of a court;
• b. severance payments under (i) and (ii) where the investment firm is able to demonstrate the reasons and the appropriateness of the amount of the severance payment:
• (i) severance payments calculated through an appropriate predefined generic formula (e.g. gardening leave) set within the remuneration policy in the cases referred to in paragraph 161;
• (ii) severance payments corresponding to the additional amount due in application of a non-competition clause in the contract and paid out in future periods up to the amount of the fixed remuneration which would have been paid for the non-competition period, if staff were still employed.
• c. severance payments under paragraph 161, not fulfilling the condition in point (i) of paragraph 166, where the investment firm has demonstrated to the competent authority the reasons and the appropriateness of the amount of the severance payment.

1. Overview

1.1 References

• Article 32 Variable remuneration

1.2 Identified Requirements

1.3 Related Standards

2. Identified Requirements

3. Related Standards

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