Regulatory Alerts2026-03-08
Quality as the Foundation of an Appropriate Remuneration Policy
The Dutch Financial Markets Authority (AFM) issued this analysis report requiring audit firms of entities of public interest (OOB) to align their remuneration policies with quality-driven performance incentives for statutory audits. The regulator found that while most firms have adequately designed their policies, critical NBA measures such as profit-independent executive pay and claw-back provisions remain inconsistently implemented. The AFM recommends that firms enhance monitoring and evaluation processes, increase transparency regarding quality metrics in partner and executive compensation, and ensure quality criteria are demonstrably decisive in variable pay.
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