Prudential Regulation Authority Rulebook

7.1

In this Chapter, 7.4 applies generally, not only in relation to material risk takers.

7.2

A firm must ensure that its management body in its supervisory function adopts and periodically reviews the general principles of the remuneration policy and is responsible for overseeing its implementation.

[Note: Art. 92(2)(c) of the CRD and Standard 1 of the FSB Compensation Standards]

[Note: CRD]

7.3

A firm must ensure that the implementation of the remuneration policy is, at least annually, subject to central and independent internal review for compliance with policies and procedures for remuneration adopted by the management body in its supervisory function.

[Note: Art. 92(2)(d) of the CRD and Standard 1 of the FSB Compensation Standards]

[Note: CRD]

7.4

A firm that is significant in terms of its size, internal organisation and the nature, scope and complexity of its activities must establish a remuneration committee, and ensure that the committee:

1. (1) is constituted in a way that enables it to exercise competent and independent judgment on remuneration policies and practices and the incentives created for managing risk, capital and liquidity;
2. (2) comprises a chairman and members who are members of the management body who do not perform any executive function in the firm;
3. (3) is responsible for the preparation of decisions regarding remuneration, including those which have implications for the risk and risk management of the firm and which are to be taken by the management body; and
4. (4) takes into account, when preparing such decisions, the long-term interests of shareholders, investors and other stakeholders in the firm as well as the public interest.

[Note: Art. 95 of the CRD and Standard 1 of the FSB Compensation Standards]

[Note: CRD]

7.5

A firm that maintains a website must explain on the website how the firm complies with this Part.

[Note: Art. 96 of the CRD]

[Note: CRD]