2.5 Review of the remuneration policy

63.The supervisory function or, where established, the remuneration committee should ensure that the remuneration policy and practices of the institution are subject to a central and independent internal review at least annually. The review should include an analysis of whether the remuneration policy is gender neutral.

64.Institutions should monitor the development of the gender pay gap on a country-by-country basis separately for:

• a. identified staff, excluding members of the management body;
• b. members of the management body in its management function,
• c. members of the management body in the supervisory function; and
• d. other staff.

65.Where material differences between the average pay of male and female staff or male and female members of the management body exist, institutions should document the main reasons and take appropriate action where relevant, or should be able to demonstrate that the difference does not result from a remuneration policy that is not gender neutral.

66.A central review of compliance with the regulation, group policies, procedures and internal rules should be performed by the internal audit function of the consolidating institution.

67.Institutions should perform the central and independent review on an individual basis. In a group, non-significant institutions which are subsidiaries may rely on the review performed by the consolidating institution, where the review performed on the consolidated or sub-consolidated basis included the institution and where the results are made available to the supervisory function of that institution.

68.Notwithstanding the responsibility of the management body, the tasks of the periodic independent review of remuneration policies may be, partially or totally, outsourced by institutions that are non-significant institutions²¹ . Qualified and independent external consultants²² may complement and support the institution in carrying out such tasks. The supervisory function is responsible for the review.

69.As part of the central and independent internal review, institutions should assess whether the overall remuneration policies, practices and processes:

• a. operate as intended (in particular, that approved policies, procedures and internal rules are being complied with; that the remuneration pay outs are appropriate, in line with the business strategy; and that the risk profile, long-term objectives and other goals of the institution are adequately reflected);
• b. are compliant with national and international regulations, principles and standards; and
• c. are consistently implemented across the group, are compliant with Articles 141 and 141b of Directive 2013/36/EU and with Article 16a of Directive 2014/59/EU and do not limit the institution ’ s ability to maintain or restore a sound capital base in line with section 6 of these guidelines.

70.The other relevant internal corporate functions (i.e. human resources, legal, strategic planning, etc.), as well as other key supervisory function committees (i.e. audit, risk and nominations committees), should be closely involved in reviewing the remuneration policies of the institution in order to ensure alignment with the institutions ’ risk management strategy and framework.

71.Where periodic reviews reveal that the remuneration policies do not operate as intended or prescribed or where recommendations are made, the remuneration committee, where established, or the supervisory function, should ensure that a remedial action plan is proposed, approved and timeously implemented. 72.The results of the internal review performed and actions taken to remedy any findings should be documented, either through written reports or through the minutes of the meeting of the relevant committees or the supervisory function, and made available to the management body, relevant committees and corporate functions.

²¹ See EBA guidelines on outsourcing arrangements.

²² For further details on outsourcing, refer to EBA guidelines on internal governance.

1. Forbhreathnú

1.1 Tagairtí

1.2 Ceanglais aitheanta

1.3 Caighdeáin ghaolmhara

2. Ceanglais aitheanta

3. Caighdeáin ghaolmhara

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