On 28 August 2019, the FCA published a letter (dated 19 August 2019) that it has sent to firms in which the regulator shares its findings and observations from the 2018/19 remuneration round and provides information on its approach to the supervision of remuneration for 2019/20.
In the letter, the FCA comments on:
- ex-post risk adjustments;
- diversity and inclusion;
- the annual review of remuneration policy statements; and
- its expectations of Remuneration Committee Chairs.
The FCA also states that it has been exploring key themes relating to transforming the culture in financial services, namely incentives and recognition. The FCA accredits financial incentives as a key driver of behaviour which, understandably, has a large influence on driving the culture of firms. The FCA is looking to focus on what really motivates individuals including the role of non-financial incentives and recognition and how these factors develop a successful business model. It will also measure how these incentives give rise to competing interests of different stakeholders to ensure these behaviours do not lead to consumer or market harm.
The FCA invites firms to provide views on the above issues by email.