On 3 August 2021, the FCA published a Dear Chair of the Remuneration Committee letter. The letter sets out the FCA’s remuneration approach this year and highlights some areas for Remuneration Committee Chairs to consider.
Among other things the letter draws attention to:
- The joint Discussion Paper with the PRA and Bank of England on diversity and inclusion. Firms are also urged to review pay data across all protected characteristics and act swiftly to address any disparities.
- The PRA statement of 25 May 2021 on updating requirements on the identification of ‘material risk takers’. In line with this statement firms with a fiscal year-end of 31 December should submit their Remuneration Policy Statement (RPS), Annex 1L malus and RPS tables 1a, 2 and 8 by 30 September 2021 along with: (i) a short summary of the key points in the RPS with cross-references to the full RPS, including any key changes made in the last year; and (ii) an explanation of how the Remuneration Committee Chair has assured himself/herself that their firm’s overall remuneration policies support the firm’s purpose, business strategy and values and incentivize the right behaviours and how the firm’s approach to paying variable remuneration will be considered in the continuing context of the pandemic.