3. Calculation of the discount rate 12. Institutions should calculate the applicable discount rates …

Calculation of the discount rate

12. Institutions should calculate the applicable discount rates for different parts of variable remuneration which are subject to different deferral and vesting arrangements and apply the discount rates accordingly. Institutions should use the applicable deferral periods documented within their remuneration policy.

13. The applicable discount rate equals one divided by the sum of one plus the three factors set out in section 2, raised to the power of the number of years of the vesting period, as shown in the formula below. The vesting period is the period after which the awarded variable remuneration vests. For this purpose the vesting period should be rounded down to the next integer. For pro rata vesting, institutions may also use a present value formula as described in the Annex, example 2.

1. Forbhreathnú

1.1 Tagairtí

1.2 Ceanglais aitheanta

1.3 Caighdeáin ghaolmhara

2. Ceanglais aitheanta

3. Caighdeáin ghaolmhara

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