Regulatory Alerts2011-06-10
Added · Updated
Range of Methodologies for Risk and Performance Alignment of Remuneration
The Basel Committee on Banking Supervision issued this report to analyze methodologies for aligning remuneration with risk and performance, responding to a Financial Stability Board recommendation. The document details current practices in performance measurement, ex ante risk adjustments, and deferred compensation, highlighting the diversity and evolving nature of these frameworks. It identifies key issues affecting effectiveness, such as the need for comprehensive risk capture, proportionality in application, and robust corporate governance to ensure variable pay is truly linked to prudent risk-taking.
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