In August, the U.K. Financial Services Authority (“FSA”) issued a proposal to implement the requirement in the 2010 Capital Requirements Directive (“CRD III”) that competent local authorities collect information concerning the pay practices of relevant financial services firms.  CRD III requires local authorities to transmit this information to the European Banking Authority (“EBA”) to enable it effectively to benchmark pay practices across the European Economic Area.

The Financial Services Authority proposal is based on guidance issued in July by the European Banking Authority. The FSA proposal would amend the FSA Supervision manual to require that FSA-regulated banks, building societies and investment firms with total assets of £50 billion or more submit:

  • a “Remuneration Information Benchmarking Report” concerning remuneration structures generally within the group, including total salary and bonus costs by business division, details of deferred remuneration, termination payments, and so on; and
  • a “High Earners Report” detailing the number of employees within the group (excluding non-EEA subsidiaries and branches) whose total annual remuneration exceeds €1 million; the number of high earners who are also “Code Staff” (as defined by the FSA); and such high earners’ total fixed and variable remuneration, but high earners who mainly perform their duties outside the EEA are excluded.

Much of the detail in the Remuneration Information Benchmarking Report mirrors existing remuneration disclosure rules.  However, the High Earners Report would require reporting information that has not been required previously.

Firms will be expected to submit two Remuneration Information Benchmarking Reports and two High Earners Reports by 31 December 2012; one for each of the two previous complete financial years.  Thereafter, reports should be submitted annually within two months of the firm’s accounting reference date.

FSA has requested comments on these proposals.  Comments are due no later than 30 September 2012.

 

Photo of Christopher Walter Christopher Walter

Christopher Walter works with employer clients on domestic and international HR-legal compliance, disputes, and transactional projects. Chris is a former co-chair of the firm’s International Employment practice, and previously served for eight years as Managing Partner of the London office.

Chris’s advisory practice…

Christopher Walter works with employer clients on domestic and international HR-legal compliance, disputes, and transactional projects. Chris is a former co-chair of the firm’s International Employment practice, and previously served for eight years as Managing Partner of the London office.

Chris’s advisory practice encompasses the full range of employment and employee benefits issues that matter to leading multinational employers, including the drafting of share and other incentive plans, global mobility, privacy compliance, employment issues in M&A transactions, outsourcing, workforce integration, and the implementation of core policies/codes of conduct, with a particular focus on business and human rights.

Chris began his legal career as a UK barrister, however, and also has considerable experience as an advocate before UK courts and tribunals, securing confidentiality injunctions and defending employers against claims of unfairness, discrimination and other alleged violations of employment laws.

Chris is recommended by Legal 500 UK for his “exceptional service.” Chambers UK (2015) notes that he is “focused, business-oriented and solution-driven.” Chris has been listed by Who’s Who Legal since 2007 as one of the world’s top employment lawyers.

Chris has served as chair of the International Committee of the Employment Lawyers Association and a member of ELA’s Management Committee. He is also a member of the European Employment Lawyers Association and the Share Plan Lawyers Group.

Chris regularly publishes articles and speaks on employment and data privacy law at both external seminars and in-house client training events.