Noel Rock (Dublin North West, Fine Gael)
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138. To ask the Minister for Finance if he will be monitoring proposed regulations in the UK on payments to bank executives; if he will introduce similar measures after reports showed that 26 bankers received €50 million in salaries and bonuses in 2015; and if he will make a statement on the matter. [8189/17]

Michael Noonan (Limerick City, Fine Gael)
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The Capital Requirements Directive IV (CRD IV), has introduced a European wide framework governing remuneration for bank executives. The European framework on remuneration applies to all financial institutions subject to CRD IV, which I as Minister for Finance am responsible for implementing. The disclosure of the bonuses paid in Ireland to relevant individuals in 2015 is part of this new framework, as there is a requirement for the European Banking Authority to publish aggregated data on high earners earning €1 m or more per financial year.

Along with increased transparency requirements, CRD IV introduced a number of other changes to the remuneration framework for financial institutions, such as short-term targets being the focus of institutions, as a response to the remuneration policies implemented for staff resulting in significant risk taking.

The framework includes a number of criteria to prevent a return to the excesses of the past. These include requirements on individuals within a relevant entity whose professional activities have a material impact on their risk profile, known as 'material risk takers'. These material risk takers include senior management, risk takers, staff engaged in control functions and any employee receiving total remuneration that takes them into the same remuneration bracket as senior management and risk takers.

The remuneration paid to these material risk takers must consist of the following structure (which will also apply to the 26 individuals reference by the deputy):

- a substantial portion, and in any event at least 50%, of any variable remuneration should consist of equity-linked or other non-cash instruments;

- a substantial portion of the variable remuneration component, and in any event at least 40% to 60% (the latter in the case of a variable remuneration component of "a particularly high amount") should be deferred over a period of not less than three to five years;

- the variable component of the total remuneration shall not exceed 100% of the fixed component of the total remuneration of material risk takers;

- shareholders, owners or members of the institution, acting by a qualified majority can approve a higher maximum level of the variable component provided that this level does not exceed 200% of the fixed component of the total remuneration; and

- the relevant competent authority in Ireland, the Central Bank of Ireland are to be informed of recommendations to shareholders and of the result of any shareholder vote, which shall not conflict with institutions' obligations to maintain a sound capital base.

The Green Paper on Corporate Governance Reform issued by the UK Government in November last year is considering a number of options for updating the UK's corporate governance framework which includes examining executive pay, measures to increase connection between company boards and connected stakeholders and the extension of governance requirements that currently only apply to listed companies to privately held entities. I note that this Green Paper applies to the governance framework of the listed and unlisted companies in the UK. In the case of Ireland the relevant Department in this area is the Department of Jobs, Enterprise and Innovation.