Robin Fieth, Chief Executive of the BSA said
- As a sector, building societies don't have a big-bonus culture or reward excessive risk-taking. They are however subject to the same regulatory regime for remuneration as the banks.
- In some ways this makes sense as sound remuneration policies are of universal benefit.
- In other ways it doesn’t. A proportionate approach is needed which takes account of size, ownership structure, simplicity of business model and approach to risk.
- The fact that building societies are customer-owned means they don’t have shareholders (or shares) in the way that plc’s do.
- From today's announcement it appears that the European Commission has advised that there will be no proportional approach. This means that all financial services firms (irrespective of size and ownership structure) will be subject to the full range of the CRD 4 remuneration provisions.
- Clearly for organisations without shares the requirement to pay a proportion of deferred bonuses in shares is a nonsense.
- The European Banking Authority plans to challenge this lack of proportionality and we applaud and support them in that challenge.
. "As customer-owned organisations, building societies don't have shares and therefore they can’t issue them as part of a remuneration package. We applaud and support the European Banking Authority in their plan to challenge the European Commission on their lack of proportionality.”