1. Remuneration policies for all staff

In accordance with Article 74 of Directive 2013/36/EU, institutions are required to have in place a remuneration policy for all staff. The remuneration policy for all staff should comply with the principles set out in Articles 92 and 94 of Directive 2013/36/EU and these guidelines, taking into account the mapping of the requirements within Annex I⁹ . The remuneration policy for all staff should be gender neutral, i.e. staff, independent of their gender, should be equally remunerated for equal work or work of equal value in line with point 65 of Article 3(1) of Directive 2013/36/EU and Article 157 of the TFEU.

⁹ Annex 1 to these guidelines indicates the requirements for which an institution-wide application to all staff in line with the additional guidelines provided is required or recommended.

The remuneration policy should specify all components of remuneration and also include the pension policy, including, where relevant, the framework for early retirements. The remuneration policy should also set a framework for other persons acting on behalf of the institution (e.g. tied agents), ensuring that the payments made are not providing any incentive for excessive risk taking or the mis-selling of products. All institutions should consider which requirements of the remuneration policy on the variable remuneration of identified staff under Article 94 of Directive 2013/36/EU should be included in the remuneration policy for all staff.

The institution ’ s remuneration policy for all staff should be consistent with the objectives of the institution ’ s business and risk strategy, including environmental, social and governance (ESG¹⁰ ) risk-related objectives, corporate culture and values, risk culture, including with regard to long-term interests of the institution, and the measures used to avoid conflicts of interest, and should not encourage excessive risk taking. Changes of such objectives and measures should be taken into account when updating the remuneration policy. Institutions should ensure that remuneration practices are aligned with their overall risk appetite, taking into account all risks, including reputational risks and risks resulting from the mis-selling of products. Institutions should also take into account the long-term interests of shareholders or owners, depending on the legal form of the institution.

¹⁰ See also Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability ‐ related disclosures in the financial services sector.

Institutions should be able to demonstrate to the competent authorities that the remuneration policy and practices are consistent with and promote sound and effective risk management.

Where variable remuneration is awarded, such awards should be based on the institutions ’ , business units ’ and staff ’ s performance and take into account the risks taken. The remuneration policy should make a clear distinction with regard to the variable remuneration and the performance assessment between the operating business units, corporate and control functions.

The remuneration policy should support the institution in achieving and maintaining a sound capital base in line with section 6 of these guidelines. The remuneration policy should also take into account the restrictions on distributions under Articles 93, 141 and 141b of Directive 2013/36/EU and Article 16a of the BRRD.

The remuneration policy should contain:

• a. the performance objectives for the institution, business areas and staff;
• b. the methods for the measurement of performance, including the performance criteria;
• c. the structure of variable remuneration, including where applicable the instruments in which parts of the variable remuneration are awarded;
• d. the ex ante and ex post risk-adjustment measures of the variable remuneration¹¹ .

¹¹ Specific requirements for the remuneration of identified staff and its risk alignment are contained in Titles III and IV of these guidelines.

Institutions should ensure that potential conflicts of interest caused by the pay out of instruments as part of the variable or fixed remuneration are identified and managed. This includes that the compliance with insider trading rules is ensured and that no measures are taken that can have a short-term impact on the share or instruments price.

Where remuneration policies or group remuneration policies are implemented in institutions, including in their subsidiaries, and the staff of the institution are also the majority owners of the institution or the subsidiary, the remuneration policy should be adjusted to the specific situation of these institutions or subsidiaries. For identified staff, the institution should ensure that the remuneration policy complies with the relevant CRD requirements within Articles 92 and 94 and these guidelines.

Without prejudice to any measures adopted by Member States¹² to prevent or compensate for disadvantages in professional careers of the underrepresented gender¹³ , the remuneration policy and all related employment conditions that have an impact on the pay per unit of measurement or time rate should be gender neutral, i.e. there should be no differentiation between staff of the male, female or diverse genders.

¹² E.g. when implementing Directive 2006/54/EC.

¹³ While Article 157 of the TFEU uses the term ’underrepresented sex’, the CRD uses the term ’underrepresented gender’; both terms have the same meaning for the purpose of these guidelines.

A gender-neutral remuneration policy should ensure that all aspects of the remuneration policy are gender neutral, including the award and pay-out conditions for remuneration. Institutions should be able to demonstrate that the remuneration policy is gender neutral.

When determining the pay per unit of measurement or time, institutions should duly consider the remuneration awarded, working time arrangements, annual leave periods and other financial and non-financial benefits. Institutions may use as a unit of measurement the annual gross remuneration of staff calculated on a full-time equivalent basis.

In order to monitor that gender-neutral remuneration policies are applied, institutions should document appropriately the value of the position, e.g. by documenting job descriptions or defining wage categories, for all staff members or categories of staff and determine which positions are considered as having an equal value, e.g. by implementing a job classification system, taking into account at least the type of activities, tasks and duties assigned to the position or staff member. Where a job classification system is used for determining pay, it should be based on the same criteria for men, women and staff of diverse genders and drawn up so as to exclude any discrimination, including on grounds of gender.

Institutions may consider in a gender-neutral manner additional aspects when determining the remuneration of staff. Such aspects may include:

• a. educational, professional and training requirements, skills, effort and responsibility, work undertaken and the nature of tasks involved¹⁴ ;
• b. the place of employment and its costs of living;
• c. the hierarchical level of staff and if staff have managerial responsibilities;
• d. the level of formal education of staff;
• e. the scarcity of staff available in the labour market for specialised positions;
• f. the nature of the employment contract, including if it is temporary or a contract with an indefinite period;
• g. the length of professional experience of staff;
• h. professional certifications of staff;
• i. appropriate benefits, including the payment of additional household and child allowances to staff with spouses and dependent family members.

¹⁴ See also Commission recommendation of 7.3.2014 on strengthening the principle of equal pay between men and women through transparency.