In relation to remuneration, including the bank or controlling company’s remuneration policies, processes and procedures, a bank or controlling company, as the case may be, shall disclose to the public such qualitative and such quantitative information as may be directed in writing by the Authority.
[Words preceding paragraph (i) substituted by section 13(e) of Notice No. 724, GG44003, dated 18 December 2020 - effective 1 January 2021]
| (A) | the bank's relevant governance and/or committee structures; |
| (B) | the design and operation of the bank's remuneration structure, and the frequency of review; |
| (C) | the independence of remuneration for risk and compliance staff; |
| (D) | the relevant risk adjustment methodologies; |
| (E) | the link between remuneration and performance; |
| (F) | the relevant long-term performance measures, such as deferral, malus or clawback; |
| (G) | the relevant types of remuneration, such as cash versus equity, and fixed versus variable; |
| (ii) | which qualitative information, as a minimum, shall include— |
| (A) | information relating to the relevant bodies that oversee the bank's remuneration, including— |
| (i) | the relevant name, composition and mandate of the main body overseeing remuneration; |
| (ii) | external consultants whose advice has been sought, the body by which they were commissioned, and in what areas of the remuneration process; |
| (iii) | a description of the scope of the bank's remuneration policy, for example, by regions and business lines, including the extent to which it is applicable to foreign subsidiaries and branches; |
| (iv) | a description of the types of employees considered as material risk takers and as senior managers, including the number of employees in each relevant group; |
| (B) | information relating to the design and structure of the bank's remuneration processes, including |
| (i) | an overview of the key features and objectives of the bank's remuneration policy; |
| (ii) | whether the remuneration committee reviewed the bank's remuneration policy during the past year, and if so, an overview of any material changes that were made; |
| (iii) | a discussion of how the bank ensures that risk and compliance employees are remunerated independently of the relevant businesses they oversee; |
| (C) | a description of the ways in which current and future risks are taken into account in the bank's remuneration processes, including— |
| (i) | an overview of the key risks that the bank takes into account when implementing remuneration measures; |
| (ii) | an overview of the nature and type of the key measures used to take account of the said risks, including risks difficult to measure; |
| (iii) | a discussion of the ways in which the said measures affect remuneration; |
| (iv) | a discussion of how the nature and type of the said measures has changed over the past year and reasons for the change, as well as the impact of changes on remuneration; |
| (D) | a description of the manner in which the bank seeks to link performance during a performance measurement period with levels of remuneration, including— |
| (i) | an overview of main performance metrics for bank, top-level business lines and individuals; |
| (ii) | a discussion of how amounts of individual remuneration are linked to bank-wide and individual performance; |
| (iii) | a discussion of the measures the bank in general implement to adjust remuneration in the event that performance metrics are weak, including the bank's criteria for determining "weak" performance metrics; |
| (E) | a description of the manner in which the bank seeks to adjust remuneration to take account of longer-term performance, including— |
| (i) | a discussion of the bank's policy on deferral and vesting of variable remuneration, and when the fraction of variable remuneration that is deferred differs across employees or groups of employees, a description of the factors that determine the fraction and their relative importance; |
| (ii) | a discussion of the bank's policy and criteria for adjusting deferred remuneration before vesting and, when relevant, after vesting through, for example, clawback arrangements; |
| (F) | a description of the different forms of variable remuneration that the bank utilises, and the rationale for using such different forms of variable remuneration, including— |
| (i) | an overview of the respective forms of variable remuneration offered, that is, for example, cash, shares and share-linked instruments, or other forms, with a sufficiently detailed description of the core elements of such other forms; |
| (ii) | a discussion of the use of the different forms of variable remuneration and, when the mix of different forms of variable remuneration differs across employees or groups of employees, a description of the factors that determine the mix and their relative importance; |
| (iii) | which quantitative information shall relate to and separate between the bank's senior management and other employees whose actions may have a material impact on the bank's exposure to risk, and, as a minimum, shall include— |
| (A) | the relevant number of— |
| (i) | meetings held by the main body overseeing remuneration during the financial year, and the remuneration paid to its members; |
| (ii) | employees who received a variable remuneration award during the financial year; |
| (B) | the relevant number of and total amount related to— |
| (i) | guaranteed bonuses awarded during the financial year; |
| (ii) | sign-on awards made during the financial year; |
| (iii) | severance payments made during the financial year; |
| (C) | the relevant total amount of— |
| (i) | outstanding deferred remuneration, duly distinguishing between cash, shares and share-linked instruments, and other forms of deferred remuneration; |
| (ii) | deferred remuneration paid out in the financial year; |
| (D) | a breakdown of the amount of remuneration awards for the financial year, clearly separating between— |
| (i) | fixed and variable remuneration; |
| (ii) | deferred and non-deferred remuneration; and |
| (iii) | the different forms of remuneration used, that is, cash, shares and share-linked instruments, and other forms of remuneration, |
as indicated in table 1 below:
Table 1
Total amount of remuneration
for the financial year
|
Unrestricted
|
Deferred
|
Fixed remuneration
|
|
|
of which:
Cash-based
|
x
|
x
|
Shares and share-linked instruments
|
x
|
x
|
Other
|
x
|
x
|
Variable remuneration
|
|
|
of which:
Cash-based
|
x
|
x
|
Shares and share-linked instruments
|
x
|
x
|
Other
|
x
|
x
|
| (E) | sufficiently detailed information related to employees' exposure to implicit adjustments, that is, for example, fluctuations in the value of shares or performance units, and explicit adjustments, that is, for example, malus, clawbacks or similar reversals or downward revaluations of awards, of deferred remuneration and retained remuneration, clearly indicating the relevant total amount of— |
| (i) | outstanding deferred remuneration and retained remuneration exposed to ex post explicit and/or implicit adjustments; |
| (ii) | reductions during the financial year due to ex post explicit adjustments; and |
| (iii) | reductions during the financial year due to ex post implicit adjustments, |
Provided that in all relevant cases the bank shall also disclose to the public the relevant comparative quantitative information for the previous year.
