8.2 Variable remuneration based on future performance

138.When the award of variable remuneration, including LTIPs, is based on past performance of at least one year, but also depends on future performance conditions, the following should apply:

• a. Institutions should clearly set out to staff the additional performance conditions that have to be met after the award for the variable remuneration to vest.
• b. Institutions should assess before the vesting of variable remuneration that the conditions for its vesting have been met.
• c. The additional forward-looking performance conditions should be set for a predefined performance period of at least one year.
• d. When the additional forward-looking performance conditions have not been met, up to 100% of the variable remuneration awarded under those conditions should be subject to malus arrangements.
• e. The deferral period should end at the earliest one year after the last performance condition has been assessed; all other provisions regarding the deferral of variable remuneration for identified staff set out in section 15 apply in the same way as to variable remuneration that is exclusively based on performance previous to its award.
• f. For the calculation of the ratio between the variable and fixed components of the total remuneration, the total amount of the variable remuneration awarded should be taken into account in the financial year for which the variable remuneration, including LTIPs, was awarded. This should also apply when the past performance was assessed in a multi-year accrual period.

139.Where a prospective remuneration plan for variable remuneration, including LTIPs, is exclusively based on future performance conditions (e.g. where new staff receive an LTIP at the beginning of the first year of employment), the amount should be considered as awarded after the performance conditions have been met, otherwise no award should be made. Awarded amounts should be taken into account for the calculation of the ratio between the variable and fixed components of the total remuneration in the financial year prior to their award. Where a specific number of instruments are awarded, they should exceptionally be valued for the purpose of the calculation of the ratio between the variable and fixed components of the total remuneration with the market price or fair value determined at the time the prospective remuneration plan for variable remuneration was granted. Points (a) to (c) of paragraph 138 should apply. All other requirements apply in the same way as to variable remuneration, e.g. the deferral period starts after the award of the variable remuneration.

1. Översikt

1.1 Referenser

1.2 Identifierade krav

1.3 Relaterade standarder

2. Identifierade krav

3. Relaterade standarder

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