UK Prudential Regulation Authority Publishes Final Consolidated Guidance on Remuneration
The Prudential Regulation Authority has published a Policy Statement and final consolidated Supervisory Statement on its expectations on remuneration. In the latter part of 2016, the PRA consulted on its proposed changes to its guidance to bring this into line with the European Banking Authority's Guidelines on Sound Remuneration Policies which applied from January 1, 2017. The remuneration rules and guidance apply to banks, building societies and investment firms, including UK branches of non-EEA headquartered firms. The PRA has introduced a consolidated Supervisory Statement on remuneration by amalgamating the existing statements on proportionality, the application of malus to variable remuneration and other existing measures. The new Supervisory Statement covers the PRA's expectations on proportionality, material risk takers, the application of malus and clawback to variable remuneration, governing body/remuneration committees, risk management and control functions, remuneration and capital, risk adjustment (including long-term incentive plans), personal investment strategies, remuneration structures (including guaranteed variable remuneration, buy-outs and retention awards), deferral and breaches of the remuneration rules.
View the PRA's Policy Statement.
View the consolidated Supervisory Statement.
View the PRA's original consultation paper.TOPIC: Compensation