EBU Single Rulebook Q&A 3 July 2013 2013_10 Retention bonuses
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Under Article 94(1) of Directive 2013/36/EU, retention bonuses are admissible only if they are classified as variable remuneration and comply with all applicable regulatory criteria, including risk alignment, deferral, and performance-based adjustments. Such bonuses are not considered prohibited 'guaranteed variable remuneration' because they are contingent upon continued employment and must remain sustainable relative to the institution's financial situation. Institutions must substantiate a legitimate interest for these awards, such as restructuring or wind-down scenarios, and may not use them to circumvent performance-based remuneration restrictions.AI
European Union · · · 03-07-2013
Is a “retention bonus”, i.e. a bonus solely granted for staying with a credit institution for a pre-defined time, still admissible in the light of remuneration principle Article 94(1)(e) of Directive 2013/36/EU (replacing Annex V, Section 11, point 23 (j) of Directive 2006/48/EC (CRDIII))? Supervisory experience shows that “retention bonuses” are quite common in credit institutions.
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