Regulatory Alerts2015-08-13
Added
Remuneration Policy in a Banking Corporation
The Bank of Israel amends Proper Conduct of Banking Business Directive no. 301A to require banking corporations to implement a clawback mechanism for variable remuneration paid to key employees, limited to a five-year period from the grant date, with a two-year extension if specific investigation conditions are met. The amendment prohibits variable remuneration for the chairperson and other board members, mandating fixed remuneration only, while allowing the chairperson to receive social benefits and ancillary expenses. Additionally, the directive prohibits key employees from receiving remuneration directly from controlling owners or their related entities and requires each corporation in a banking group to bear the costs of its own senior officeholders. These requirements apply to remuneration agreements approved on or after the circular's publication date, with a transition deadline of December 31, 2017, for existing agreements.
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