Esma Guidelines on Certain Aspects of the Mifid Ii Remuneration Requirements
Q3: Do you agree that in order to reconcile the interests of the individuals or companies concerned with the long-term interests of customers, companies should consider the possibility of adjusting the remuneration previously granted using ex-post adjustment criteria in their remuneration policies and practices (such as recoveries and malus)? Please also indicate the reasons for your response. Career advancement can affect fixed compensation, but this is not always the case. Fixed compensation is usually based on experience, responsibility and market practices, but generally does not depend on performance or sales targets. Titles and extended responsibilities (p.B, committee members), etc. are all included in career advancement, but do not necessarily come with a fixed salary increase. Paragraph 18: Level of detail of a document at the level of the management body, i.e. the remuneration policy, which should be included, is exaggerated. However, they should not have access to individual remuneration data, which should be considered confidential personal data, the use of which is limited to the human resources department or any other entity concerned. In accordance with the Guidelines (paragraph 50), information management tools should be used to collect the qualitative data necessary for the determination of remuneration.
Qualitative elements should also be part of the criteria for personal evaluation. FFI supports the principle of using data wherever possible, but in practice this means that designing and monitoring remuneration requires more resources than before, which could be problematic, especially in the short term. There is a risk that requirements will become too complicated, expensive and time-consuming. Although the paragraph requires entities to “consider paying variable compensation partly in advance and partly deferred” and does not require variable compensation to be deferred, companies should only consider deferring compensation if the amounts in question are significant. This is important for two reasons. First, there are significant costs and resources associated with operating delay systems. Costs outweigh benefits if the requirement is extended to all remuneration, even small amounts. In addition, the incentives offered by remuneration are watered down from the employee`s point of view, even if small amounts are carried forward. All directives, regulations, amending texts, SEC texts, etc. applicable to the remuneration in the EU of managers, UCITS management companies and investment firms in one place.
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