Remuneration Code (again)

Following Regulatory Roundup #18 – ‘Remuneration Code Special’ – we would like to take this opportunity to remind firms that a proportionality approach can be adopted and our article advised referring to Annex 5 for those rules have to be applied by all firms and those rules which can have proportionality applied to them.

The ‘must do’ elements of the Remuneration Code are set out in Proportionality Table 1 in Annex 5 of CP10/19.

On the other hand Proportionality Table 3 in Annex 5 tells us that a proportional approach can be taken to, and a de minimis concession applied to, some of the proposed rules surrounding ‘Principle 12 – Remuneration Structures’. In particular proportionality can be applied to ‘guaranteed variable remuneration’ (SYSC 19.3.38); to share-based awards [the ‘at least 50% in shares’ rule] (SYSC 19.3.45); to deferral [the ‘at least 40% to be deferred’ rule] (SYSC19.3.46); and to performance adjustment (SYSC 19.3.48)

The draft Remuneration Code rules are in Appendix 1 of CP10/19. SYSC 19.3.6 provides guidance on rules that ‘the FSA would not generally consider it necessary for a firm to apply’ when variable remuneration is no more that 33% of total remuneration and where total remuneration is no more than £500,000).

The FSA welcomes comments on the proposals. If you want to make your views known to the Regulator then you can send them via

Note that responses to all comments are available for public inspection unless the respondent requests otherwise.

The consultation period ends 8 October.