Amendments of the Act on Credit Institutions
EU news, April 2013
Croatian Parliament has adopted Act on amendments of the Act on credit institutions (“Act”) on the session held on 19 April 2013. The Act will come into force eight days from that date it has been published in the official gazette “Narodne novine”.
Among other, with this Act legal preconditions are set up with the purpose of establishing remuneration policy in credit institutions in accordance with EU Directive 2010/76/EU.
Above mentioned Directive is prescribing that credit institution has to have remuneration policy aligned with its long term goals. Remuneration of the employees has to be defined in fixed and variable portion and variable portion has to be linked with the employees’ performance and performance of the respective institution. Substantial portion of the variable remuneration should consist of financial instruments, and 40% to 60% should be deferred over an appropriate period of time (from 3 up to 5 years).
In respect of the remuneration policy, the Act is introducing following obligations:
- Supervisory Board of credit institution has to constitute a remuneration committee, whose members are the members of the supervisory board.
- Credit institution has to establish and manage efficient remuneration policy which is aligned with efficient risk management and supports efficient risk management.
- Credit institutions are not allowed to pay variable remuneration if their payment is not aligned with the provisions of this Act, legal preconditions or policy and decisions of the credit institution.
In addition to that, Croatian National Bank may prescribe rules and procedures regarding remuneration policy, i.e. Croatian National Bank can publish Decision with which remuneration policy will be determined in more details.
Decision from Croatian National Bank is expected to be published shorty.