Recent Remuneration Policy Updates
The latest update is done to meet the requirements on measures to avoid conflict of interest, remuneration structure, eligibility for the bonus, and measures to avoid excessive risk-taking according to the Governance chapter in section II of Circular CSSF 10/43. The article on Job Grades was edited to provide better clarity and to be consistent with the latest job grade classification.
Following articles were added:
- Transparency & Reporting
- Record Keeping & Compliance
- Remuneration Committee
- Reviews & Amendments
Information concerning the decision-making process used for determining the remuneration policy, including if applicable, information about the composition and the mandate of a remuneration committee, the name of the external consultant whose services have been used for the determination of the remuneration policy and the role of the relevant stakeholders
The Board of Directors establishes the general principles of this remuneration policy.
The HR department shall ensure that the implementation of the remuneration policy is subject, at least on an annual basis, to central and independent internal review by control functions for compliance with policies and procedures defined by the board of directors. The control functions shall report on the outcome of this review to the board of directors.
The committee advises the Board of Directors and is responsible for:
- assisting the Board in reaching decisions on the principles of employee remuneration;
- assisting the Board in reviewing this remuneration policy and ensuring that performance assessments and remuneration decisions take into account bonus caps, deferral of variable pay, clawback provisions and gender-neutral remuneration policies;
- the committee meets at least once annually to fulfil its mandate and ensure alignment with applicable CSSF regulations and best practices.
The Committee shall be composed of at least one Authorised Manager, the Board of Directors, and a representative of the shareholder of the Company.
Information on the link between pay and performance
There is a link between performance levels and the bonus amounts awarded. This is set out in the individual appraisal forms which sets out the employee self-assessment score and the manager’s assessment score. The total score will determine the employees’ performance rating. This total score will go through a bell curve standardisation process (defined at group level) to determine the employee’s final performance rating.
The bell curve standardisation process defined at group level is as follows. bFEU will endeavour to align with this to the extent possible. Given the fewer employees in bFEU, some evaluation categories (for example, 5 or 1) may not have any employees in it.
Information on the criteria used for performance measurement and risk adjustment
Individual variable remuneration awards are discretionary in nature, based on an assessment of the individual performance by managers, formalized in the annual appraisal, on the basis of objective criteria, both quantitative and qualitative, which are set during objective setting meetings at the beginning of the year and divided into categories.
At no time will bFEU award bonuses for increased risk taking, compliance breaches or potential compliance breaches and/or projects or approvals that promote its business position at the expense of compliance with AML/CFT rules or any applicable regulation or internal policies.
Information on the performance criteria on which the entitlement to shares, options or variable components of remuneration is based
Performance: Business, which includes standard and non-standard projects; Skills; Organization. Value: Execution, Passion and Number.
All the categories must be clarified to the employee during the objective setting meeting.
With regards to the control functions, performance is measured based on the effectiveness of the control function in protecting the Company from compliance breaches and/or enabling reduced exposure to regulatory sanctions or fines. It may also take into account the projects managed and objectives set at department level. In particular, financial goals are avoided for control functions to ensure an adequate degree of independence with respect to business subject to controlling activities and to avoid any conflict of interest.
The main parameters and rationale for any annual bonus scheme and any other non-cash benefits
All employees under permanent contract who successfully passed their probation period within the calendar year, are eligible for the variable component, i.e. an annual bonus for that year. The annual bonus rewards the individual / team performance, and is defined by managerial discretion on the basis of the level of achievement of pre-defined performance drivers, i.e. employee objectives.