259. Where the general principles of national contract and labour law prevent the substantial …

Where the general principles of national contract and labour law prevent the substantial reduction of variable remuneration where subdued or negative financial performance of the investment firm occurs, investment firms should apply a deferral scheme and use instruments for the award of variable remuneration that ensure that ex post risk adjustments are as far as possible applied. This may include any of the following:

• a. setting longer deferral periods;
• b. avoiding the use of pro rata vesting in situations where malus can be applied, but the application of clawback would be subject to legal impediments;
• c. awarding a higher portion of variable remuneration in instruments that are aligned to the performance of the investment firm and subject to sufficiently long deferral and retention periods.

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/