1. Inappropriate remuneration structures have been a contributing factor to excessive and imprudent risk taking. Poorly designed remuneration policies have potentially detrimental effects on the sound management of risks, control of risk and the risk taking behaviour of individuals. The current remuneration requirements are set by Directive 2013/36/EU (CRD), which came into effect on 1 January 2014. The CRD has been amended by Directive (EU) 2019/878; the amendments are to be implemented by Member States by 28 December 2020.

2. The remuneration requirements aim to ensure that remuneration policies are consistent with and promote sound and effective risk management, do not provide incentives for excessive risk taking, and are aligned with the long-term interests of the institutions across the EU.