The FCA has published a letter it has sent to firms that are subject to the annual remuneration round.
The letter provides information ahead of the 2016/17 remuneration round and shares the regulator’s findings and observations from the 2015/16 remuneration round.
Among other things the 2016/17 remuneration round will focus on:
- material risk takers – identification of roles that have a material impact on the firm’s risk profile, particularly those involving material conduct risk;
- bonus pools and individual performance assessment – the balance and relative importance of risk and performance measures used to determine levels of variable remuneration and how these transparently demonstrate how performance has been risk-adjusted in a way that supports positive behaviours that embed a strong conduct culture;
- ex-post risk adjustment – breadth and robustness of action taken to prevent rewards for conduct failure and discourage excessive risk taking or misconduct; and
- policy changes – compliance with latest requirements and progress against feedback, in particular how firms have implemented the Senior Managers’ Regime and the extent to which the Remuneration Committee Chair/Non-Executive Director with remuneration responsibility has been empowered to take appropriate action.
View FCA letter to proportionality level 1 firms on 2016/17 remuneration round, 28 November 2016