The ratio between the variable and fixed remuneration components of identified staff is limited to 100% to restrict their incentive to take excessive risks. Institutions can increase this ratio to 200% with the shareholders' approval, if Member States allow for this possibility. The European Banking Authority (EBA) has collected information on this practice and benchmarked the extent to which higher ratios are used by institutions within different Member States. 

 

All but six EU Member States have implemented the possibility for institutions to increase the maximum ratio between the variable and the fixed remuneration to 200% with the shareholders' approval. Institutions made use of such possibility only in 15 Member States. 

 

The report highlights that the practice of increasing the maximum ratio between the two components is more frequent among those institutions located in Member States where higher levels of remuneration and higher ratios were observed in the past.

 

Institutions with approved higher ratios account for slightly more than half of the market share of the banking system. Most of the identified staff that can receive a higher ratio of variable remuneration is active in the area of investment banking. 

 

Press release

Benchmarking report on approved higher ratios for remuneration