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Rules on remuneration policy for financial undertakings

13.10.2011

The Financial Supervisory Authority in Iceland published rules on remuneration policy for financial undertakings on 30 June 2011. The rules apply limits on variable remuneration. According to the rules, the aggregate of variable remuneration including deferred payments, which is granted to an employee per annum, shall not amount to more than 25% of the annual salary of the employee in question, exclusive of variable remuneration. Moreover the payment of at least 40% of the variable remuneration shall be deferred for a minimum of three years. 

According to the rules, a remuneration policy shall not provide for a guaranteed bonus, i.e. a bonus paid to an employee independent of his or her performance. Also the rules provide for a reduction, revocation or reimbursement of variable remuneration when the required performance is not achieved.

An English translation of the rules can be downloaded here.

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