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+Example 3 |
Example 3The following example is based on a given amount of fixed remuneration of EUR 100 000 and shows how to calculate the maximum possible amount of variable remuneration which could be awarded if 25% of the variable remuneration is paid in instruments that are deferred for five years, assuming that the full amount vests at the end of the deferral period. The inflation rate and interest rate for government bonds provided under example 1 are used. The same assumptions regarding Member State's transposition of Directive 2013/36/EU (25%), shareholders' approval for ratio higher than 1:1 (none) and performance year (2014) apply as under example 1. If lower rates are prescribed by the Member State, the formula needs to be amended accordingly by replacing 0.25 with the lower percentage. In this example, the total variable remuneration that can be paid is up to a maximum of 100% of the fixed components of remuneration and the maximum variable remuneration that can be discounted is 25% provided it is paid in instruments that are deferred for at least five years. Hence, we can write the following equation: ( ) ( ) fr = fixed remuneration tvr = total variable remuneration i = inflation rate; g = interest rate for government bonds EU average; id = incentive factor for use of long-term deferral; n = length of the vesting period. By replacing the corresponding amounts considered in this example for each variable in the equation above, we obtain: ( ) fr = 100 000 i = 2%, factor for inflation g = 2.73% factor for government bond interest rate id = 10% , factor for five year deferral, n = 5, length of vesting period. Solving the previous equation for tvr, we obtain: For the above example, the maximum variable remuneration which can be paid if 25% of the variable remuneration is discounted is EUR 114 186.10. 1. Forbhreathnú
1.1 Tagairtí1.2 Ceanglais aitheanta1.3 Caighdeáin ghaolmhara2. Ceanglais aitheanta
3. Caighdeáin ghaolmhara
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