Regulatory Alerts2023-06-24
Banks Remuneration Rules
Saudi Central Bank (SAMA) has issued updated Banks Remuneration Rules effective June 2023, mandating locally incorporated banks and foreign branches to align their compensation frameworks with prudent risk management and misconduct prevention. The regulations require boards to oversee remuneration design while ensuring at least 40 percent of variable pay is deferred and awarded in shares or non-cash instruments, with senior management accountability tied to clear misconduct definitions. Banks must align existing employment contracts with these standards by the effective date and submit periodic compliance reports, replacing the 2010 compensation guidelines with a comprehensive policy covering performance measurement, risk-adjusted incentives, and supervisory review.