13 Amendments of Karima DELLI related to 2009/0099(COD)
Amendment 43 #
Proposal for a directive – amending act
Recital 4
Recital 4
(4) Because excessive and imprudent risk- taking may undermine the financial soundness of financial institutions and destabilise the banking system, it is important that the new obligation concerning remuneration policies and practices should be implemented in a consistent manner. It is therefore appropriate to specify clear core principles on sound remuneration to ensure that the structure of remuneration does not encourage excessive risk-taking by individuals and is aligned with the risk appetite, values and long-term interests of the institution and of its employees generally. In order to ensure that the design of remuneration policies is integrated in the risk management of the financial institution, the management body (supervisory function) of each credit institution or investment firm should establish the general principles to be applied, and the policies should be subject to at least annual independent internal review. Credit institutions and investment firms of significant size should set up independent remuneration committees as an integral part of their governance structure and organisation. Remuneration committees should cooperate with the risk and compliance function and with the staff representative bodies (notably the works council) in order to supervise the incentives created for managing risk, capital and liquidity.
Amendment 46 #
Proposal for a directive – amending act
Recital 5
Recital 5
(5) Remuneration policy should aim at aligning the personal objectives of staff members with the long-term interests of the credit institution or investment firm concerned. The assessment of the performance-based components of remuneration should be based on longer- term performance and take into account the outstanding risks associated with the performance. The assessment of performance should be set in a multi-year framework, for example of three to five yearsof at least five years, for example, in order to ensure that the assessment process is based on longer-term performance and that the actual payment of performance-based components of remuneration is spread over the business cycle of the firm. Corporate social responsibility targets should be included in the assessment of longer-term performance justifying the deferred payment of variable remuneration.
Amendment 48 #
Proposal for a directive – amending act
Recital 5 a (new)
Recital 5 a (new)
(5a) Payment of the variable remuneration component ought to be deferred over an appropriate period. That period should increase significantly along with the level of seniority or responsibility. Moreover, a substantial portion of the variable remuneration component should be paid in the form of shares in the credit institution or investment firm, or share- linked instruments other than stock options, subject to the legal structure of the institution concerned. In the case of non-listed credit institutions or investment firms, that payment should, where appropriate, be made in other non-cash instruments. In that context, the principle of proportionality is of great importance since it may not always be appropriate to apply those requirements in the context of small credit institutions and investment firms.
Amendment 51 #
Proposal for a directive – amending act
Recital 5 b (new)
Recital 5 b (new)
(5b) Credit institutions and investment firms should require their staff members to undertake not to use personal hedging strategies or insurance to undermine the risk-alignment effects embedded in their remuneration arrangements. Failure to observe this undertaking should be penalised in a sufficient, proportionate and deterrent manner.
Amendment 52 #
Proposal for a directive – amending act
Recital 12
Recital 12
(12) In order to ensure adequate transparency to the market of their remuneration structures and the associated risk, credit institutions and investment firms should disclose detailed information on their remuneration policies and practices for those staffand the (for reasons of confidentiality, aggregated) amounts of remuneration for those members of staff and managers whose professional activities have a materialsignificant impact on the risk profile of the institution. That information should be available to all stakeholders (shareholders, employees and the general public). However, this obligation should be without prejudice to Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with the regard to the processing of personal data and the free movement of such data. The right of employees to be informed and consulted should be respected through the involvement of the European Works Councils. Failure to observe this undertaking should be penalised in a sufficient, proportionate and deterrent manner.
Amendment 58 #
Proposal for a directive – amending act
Annex 1 – point 1
Annex 1 – point 1
Directive 2006/48/EC
Annex V – Section 11 – point 22 – point e a (new)
Annex V – Section 11 – point 22 – point e a (new)
(ea) the variable component of remuneration may not in any circumstances be guaranteed;
Amendment 59 #
Proposal for a directive – amending act
Annex 1 – point 1
Annex 1 – point 1
Directive 2006/48/EC
Annex V – Section 11 – point 22 – point f
Annex V – Section 11 – point 22 – point f
(f) fixed and variable components of total remuneration are appropriately balanced; the fixed component represents a sufficiently high proportiont least 80% of the total remuneration to allow the operation of a fully flexible bonus policy on variable remuneration components, including the possibility tof paying no bonusvariable remuneration component;
Amendment 62 #
Proposal for a directive – amending act
Annex 1 – point 1
Annex 1 – point 1
Directive 2006/48/EC
Annex V – Section 11 – point 22 – point i
Annex V – Section 11 – point 22 – point i
(i) payment of the major part of a significant bonus is deferred for an appropriate period and is linked to the future performance of the firmentire variable remuneration component is deferred for a period of not less than five years; remuneration payable under deferral arrangements vests no faster than on a pro-rata basis.
Amendment 63 #
Proposal for a directive – amending act
Annex 1 – point 1
Annex 1 – point 1
Directive 2006/48/EC
Annex V – Section 11 – point 22 – point i a (new)
Annex V – Section 11 – point 22 – point i a (new)
(ia) the variable remuneration is paid or vests only if it is sustainable according to the financial situation of the credit institution as a whole, and justified according to the performance of the business unit and the individual concerned; all things being equal, the total variable remuneration is considerably reduced, or cancelled if necessary, when the credit institution’s financial performance is subdued or negative.
Amendment 65 #
Proposal for a directive – amending act
Annex 1 – point 1
Annex 1 – point 1
Directive 2006/48/EC
Annex V – Section 11 – point 22 – point i b (new)
Annex V – Section 11 – point 22 – point i b (new)
(ib) staff members are required to undertake not to use personal hedging strategies or insurance related to remuneration or liability to undermine the risk-alignment effects embedded in their remuneration arrangements. Failure to observe this undertaking should be penalised in a sufficient, proportionate and deterrent manner.
Amendment 66 #
Proposal for a directive – amending act
Annex 1 – point 1
Annex 1 – point 1
Directive 2006/48/EC
Annex V – Section 11 – point 22 a (new)
Annex V – Section 11 – point 22 a (new)
(22a) Credit institutions that are significant as regards their size, their internal organisation and the nature, scope and complexity of their activities shall establish a remuneration committee. The remuneration committee shall be constituted in a way that enables it to exercise competent and independent judgment on remuneration policies and practices and the incentives created for managing risk, capital and liquidity. The remuneration committee shall be responsible for the preparation, in cooperation with the staff representative bodies (notably the works council), of decisions regarding remuneration, including those which have implications for the risk and risk management of the credit institution concerned and which are to be taken by the management body in its supervisory function. The remuneration committee shall be chaired by a member of the management body who does not perform any executive functions in the credit institution concerned.
Amendment 67 #
Proposal for a directive – amending act
Annex I – point 4 – point c
Annex I – point 4 – point c
Directive 2006/48/EC
Annex XII – Part 2 – point 15 – point a
Annex XII – Part 2 – point 15 – point a
(a) information concerning the decision- making process used for determining the remuneration policy, including if applicable, information about the composition and the mandate of a remuneration committee, the name of the external consultant whose services have been used for the determination of the remuneration policy and the role of the relevant stakeholders, and in particular the opinion delivered by the staff representative bodies (notably the works council);
Amendment 68 #
Proposal for a directive – amending act
Annex I – point 4 – point c
Annex I – point 4 – point c
Directive 2006/48/EC
Annex XII – Part 2 – point 15 – point e a (new)
Annex XII – Part 2 – point 15 – point e a (new)
(ea) aggregate quantitative information on remuneration, broken down by senior management and members of staff whose actions have a material impact on the risk profile of the credit institution, indicating the following: (i) the amount of the remuneration for the financial year, split into fixed and variable remuneration, and the number of beneficiaries; (ii) the amount and form of the variable remuneration, split, inter alia, into cash, shares and share-linked instruments; (iii) the amount of the outstanding deferred remuneration, split into vested and unvested portions; (iv) the amount of the deferred remuneration awarded during the financial year, paid out and reduced through performance adjustments; (v) the amount of severance payments made during the financial year and the number of beneficiaries of such payments; (vi) the amount of severance payments awarded during the financial year, the number of beneficiaries and the highest such award to a single person.