EBA scuppers bankers’ “role-based” allowances
The European Banking Authority (EBA) has tackled the so-called “role-based” allowances that banks are paying to senior staff to get round bonus caps.
According to the EBA, 39 financial institutions across the EU use “role-based” or “market value” allowances as part of fixed remuneration packages.
However, in most cases they are using the allowances to flout an EU ruling that limits variable remuneration to 100% of the fixed pay, or 200% with shareholders’ approval.
Apparently, most of the allowances examined in the EBA’s investigation couldn’t be classified as fixed remuneration and the Authority is warning institutions making use of such allowances to change their policies and reclassify the ratio between the fixed and the variable components of pay, to comply with EU rules.