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This note provides key takeways from a workshop with banks in October 2018 about implementation of the FSB’s international standards on compensation. As part of its work to monitor implementation of its Principles for Sound Compensation Practices and their Implementation Standards the FSB engages regularly with firms across financial sectors to assess the extent to which the standards have been effectively implemented. This workshop focused on:
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Big picture – a decade on from the crisis - the baseline for banks before reforms, how compensation structures have changed since the crisis and thoughts on further changes in the coming years.
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Implementation by banks of the FSB’s Principles and Standards on compensation – the practical steps banks have taken to implement reforms on compensation practice including details on which individuals are designated as material risk takers.
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Effectiveness – steps banks are taking to assess the effectiveness of current compensation policies and practices in terms of better aligning risk and reward.
Executives responsible for managing processes related to compensation at 17 large internationally active banks and officials from the FSB Compensation Monitoring Contact Group participated in the workshop.
The workshop provides one input into the FSB’s biennial compensation progress report that will be published later in 2019.
The FSB welcomes any feedback on topics discussed at the workshop and summarised in this note. Comments should be sent by Tuesday 7 May 2019 to fsb@fsb.org.
Related Information
Implementation Standards for the FSB Principles for Sound Compensation Practices
The Implementation Standards set out detailed specific proposals on compensation governance, structure and disclosure to strengthen adherence to the FSB Principles for Sound Compensation Practices.
