177. Circumvention takes place in the following circumstances, among others: a. where variable …

Circumvention takes place in the following circumstances, among others:

• a. where variable remuneration is considered as fixed remuneration in line with the wording of these guidelines, but not with its objectives;
• b. where variable remuneration other than guaranteed variable remuneration is awarded or vests although, effectively:
• i. there has been no positive performance measured in line with Title IV of these guidelines by the staff member, business unit or investment firm;
• ii. there is no effective risk alignment (i.e. ex ante or ex post risk adjustment); or
• iii. the variable remuneration is not sustainable according to the investment firm´s financial situation;
• c. where staff receive payments from the investment firm or an entity within the scope of consolidation which do not fall under the definition of remuneration, but are vehicles or methods of pay that contain an incentive for risk assumption or provide disproportionate returns on investments on instruments of the firm that are significantly different from conditions for other investors who would invest in such a vehicle;
• d. where staff receive payments from the investment firm or an entity within the scope of consolidation which do not fall under the definition of remuneration, but are vehicles or methods to circumvent the remuneration requirements;
• e. where fixed remuneration components are awarded as a fixed number of instruments and not as a fixed amount;
• f. where staff are awarded remuneration in instruments or are able to buy instruments which are not priced at the market value or the fair value in the case of non-listed instruments and the additional value received is not taken into account in the variable remuneration;
• g. where adjustments to fixed remuneration components are frequently negotiated and adjustments are in fact made to align the remuneration with the performance of staff;
• h. where allowances are awarded at an excessive amount that is not justified for the underlying circumstances;
• i. where remuneration is labelled as payment for early retirement and not taken into account as variable remuneration, where in fact the payment has the character of a severance pay, as it is made in the context of the early termination of the contract, or where in fact the staff member does not retire after such award is made or where the payments are not granted on a monthly basis;
• j. any measures that would lead to a situation where in fact the remuneration policy would not any longer be gender neutral.

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/