6. Capital base

123.Institutions and competent authorities should ensure that the award, pay out and vesting of variable remuneration, including the application of malus and clawback arrangements, under the institutions ’ remuneration policy is not detrimental to maintaining a sound capital base.

124.When assessing if the capital base is sound, the institution should take into account its overall own funds and in particular the Common Equity Tier 1 capital, the capital requirement, including the combined capital buffer requirement as defined in Article 128(6) of Directive 2013/36/EU, the leverage ratio buffer requirement as defined in Article 92(1a) of Regulation (EU) No 575/2013, the minimum requirement for own funds and eligible liabilities as defined in Article 45c of Directive 2014/59/EU and any capital add on and the restrictions on distributions set out in Articles 141 and 141b of Directive 2013/36/EU and Article 16a of Directive 2014/59/EU which applies to the variable remuneration of all staff as well as the result of the internal capital adequacy assessment process. The requirement to maintain a sound capital base and the restrictions on distributions apply also on a consolidated and sub-consolidated basis. Additionally, competent authorities should take into account the results of the supervisory review and evaluation process in line with the respective EBA guidelines. 125.Institutions should include the impact of variable remuneration – both upfront and deferred amounts – in their capital and liquidity planning and in their overall internal capital adequacy assessment process.

126.The total variable remuneration awarded by an institution must not limit the ability of the institution to maintain or restore a sound capital base in the long term and should consider the interests of shareholders and owners, depositors, investors and other stakeholders. Variable remuneration should not be awarded or paid out when the effect would be that the capital base of the institution would no longer be sound. The institution should consider these requirements, the results from the internal capital adequacy assessment process, its multi-year capital planning, the restrictions on distributions set out in Articles 141 and 141b of Directive 2013/36/EU and Article 16a of Directive 2014/59/EU and recommendations on distributions by competent authorities and European Supervisory Authorities, when determining:

• a. the overall pool of variable remuneration that can be awarded for that year; and
• b. the amount of variable remuneration that will be paid out or will be vesting in that year.

127.Institutions which do not have a sound capital base or where the soundness of the capital base is at risk should take the following measures with regard to variable remuneration:

• a. Reduce the variable bonus pool in line with Articles 141 and 141b of Directive 2013/36/EU and Article 16a of Directive 2014/59/EU, including the possibility to reduce it down to zero;
• b. Apply the necessary performance adjustment measures, in particular malus;
• c. Use the net profit of the institution for that year and potentially for subsequent years to strengthen the capital base. The institution should not compensate for any reduction of the variable compensation made in order to ensure a sound capital base in later years or by other payments, vehicles or methods which lead to a circumvention of this provision.

128.Competent authorities should intervene where the awarding of variable remuneration is detrimental to the maintenance of a sound capital base by requiring the institution to reduce or apply a cap to the overall pool of variable remuneration determined until the capital adequacy situation improves, and if necessary to apply performance adjustment measures, in particular malus, and require institutions to use net profits to strengthen own funds.

1. Ülevaade

1.1 Viited

1.2 Tuvastatud nõuded

1.3 Seotud standardid

2. Tuvastatud nõuded

3. Seotud standardid

• EBA - Published by the European Banking Authority at https://www.eba.europa.eu/