Regulatory Alerts2010-10-06
Regulation on Supervisory Requirements for Remuneration Systems of Institutions (InstitutsVergV)
The German Federal Ministry of Finance issued the InstitutsVergV to establish supervisory requirements for remuneration systems of financial institutions under the German Banking Act. The regulation mandates that remuneration structures avoid excessive risk-taking, ensure a balanced ratio between fixed and variable pay, and subject significant institutions to strict deferral and malus/clawback mechanisms. It further requires the establishment of remuneration committees in significant institutions and imposes detailed public disclosure obligations regarding compensation policies and individual payouts.
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