Finian McGrath (Dublin North Central, Independent)
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238. To ask the Minister for Finance if bank executives' contracts and bonus performance agreements are regulated and approved by the financial regulator here in order to deter banks putting market share and loan volume performance as a priority (details supplied); and if he will make a statement on the matter. [48463/14]

Michael Noonan (Limerick City, Fine Gael)
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The Capital Requirements Directive IV (CRD IV), came into effect in March of this year. The remuneration provisions contained in CRD IV seek to ensure that credit institutions and investment firms across the EU have sound remuneration policies, which reflect effective risk management and performance, without encouraging unjustified risk taking.  The European Union (Capital Requirements) Regulation (S.I 158 of 2014) transposes these provisions into Irish law  and amongst other provisions, limits the variable remuneration of officials while further allowing for the clawback of remuneration in certain circumstances. The Regulation also sets out that a portion of the variable remuneration shall be deferred for 3-5 years and that a portion shall also be taken in non-cash financial instruments.

 The remuneration framework has been further strengthened with regard to the relationship between the variable component of remuneration and the fixed component. The variable component of the total remuneration shall not normally exceed 100% of the fixed component of the total remuneration of material risk takers. Exceptionally, and under certain conditions, shareholder can increase this maximum ratio to 200%.

The Central Bank of Ireland has an important role in overseeing and monitoring remuneration levels in institutions as it is obliged to collect extensive information on persons remunerated more than €1 million per year.

The objective of these provisions is to ensure that the remuneration of bank officials is linked to the continued health and long term profitability of an institution. While the Regulations do not specifically refer to market share or loan value performance as risk indicators, the provisions have been drafted in such a manner so as to encompass these and more were they to affect the long-term viability of an institution. In those circumstances the remuneration of the bank officials concerned could be reduced or subject to a clawback, by the institution.