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Why is management of deferred compensation critical for financial services companies? At the end of 2009, FSB, CEBS (now EBA, European Banking Authority) started giving guidelines on remuneration policies and practices. Regulations have been in place in Europe, now for almost four years, and the EBA is constantly updating its guidelines about principles and criteria that banks should follow in managing deferred compensation. Also, the US Federal Reserve has said that it would implement substantially all of the Basel III rules for US financial institutions

beqom responds to EBA compliancy regulations

Main EBA regulation evolutions. Source: www.eba.europa.eu

Compensation Management Processes

What is the impact of those guidelines on the work of Heads of Compensation and Compensation Managers?

  • Increased complexity in managing bonus calculation rules
  • The need to track the full deferred earnings and payout history by individual
  • The need to audit and trace the entire process by country, company, division
  • Increased importance of transparent communication to upper

beqom Solution—How it Helps You

Since 2010, beqom has been providing companies with a software solution to manage deferred compensation to adhere to the EBA and similar regulations. Using beqom software, you will have access to a set of features needed to manage deferred compensation. With beqom you will be able to:

  • define homogenous clusters of employees/populations with different risk profiles
  • define budgets and bonus pools and track them by company/division/business unit
  • create different deferred instruments: cash, stock
  • define a split pattern between instruments based on bonus amount and risk profile
  • automatically defer bonus amounts over years and instruments
  • restate the payout of a deferred plan based on corporate performance KPIs such as EBIT, EBITDA, Core Tier and/or on individual performance
  • generate and share individual compensation statements
  • create management and Remuneration Committee reporting
  • manage a multi-company, multi-country, multi-currency deferred compensation process
  • audit and track the full process from bonus pool definition down to single employee payout

Benefits

Thanks to beqom’s deferred compensation software solution, you will be able to:

  • comply with the EBA and similar guidelines on remuneration policies and practices
  • trace and audit the entire compensation process
  • adapt the beqom solution to new EBA requirements over time
  • join the beqom community to share best practices on deferred bonus

Reality Check

  • 3 out of the top 10 banks in Europe are using beqom’s deferred compensation software solution
  • we manage deferred compensation for more than 30,000 employees

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