Consultation Paper on Draft EBA Guidelines on sound remuneration policies

On 29 October 2020, the European Banking Authority (EBA) launched a public consultation paper on revised Guidelines on sound remuneration policies under Directive 2013/36/EU (the Draft EBA Guidelines). The suggested changes made by the EBA take into account the amendments introduced by the fifth Capital Requirements Directive of the European Union (CRD V) in relation to institutions’ sound remuneration policies, which Directive EU Member States needed to implement by 29 December 2020. The public consultation process closed on 29 January 2021.

Sander Schouten and Naomi Reijn of Allen & Overy's Dutch incentive team, in collaboration with several of their European colleagues, participated in the above consultation process by providing the EBA with their comments to the Draft EBA Guidelines. Their principal comments pertain to the proposed amended wording in respect of (i) severance payments and (ii) retention bonuses. Further newly proposed restrictions are unwarranted in their view, whilst the relevant paragraphs would benefit from further clarity.

Click here to view Allen & Overy’s response to the consultation paper in full and click here to view the consultation paper itself.