Chapter III: Obligations of investment services providers

The remuneration of senior executives in charge of risk management and compliance is directly supervised by the remuneration committee referred to in article L. 533-31-4 or, if no such committee has been set up, by the board of directors, the supervisory board or any other body exercising equivalent supervisory functions in the performance of its supervisory role.

The remuneration policy of investment firms makes a distinction, based on clear criteria, between basic fixed remuneration and variable remuneration. Basic fixed remuneration primarily reflects professional experience in relation to the position held and the responsibilities exercised as stipulated in the employment contract or mentioned in the job description. Variable remuneration reflects sustainable, risk-adjusted performance on the part of the employee. It also reflects performance that goes beyond the stipulations…

The fixed portion of the total remuneration of the persons referred to in Article L. 533-30 represents a sufficiently large portion of the total remuneration to allow the greatest possible flexibility with regard to the variable portion of the total remuneration, in particular the possibility of paying none at all. The ratio of the variable part of the total remuneration to the basic fixed remuneration of the persons mentioned in…

No variable remuneration is paid to the persons mentioned in 1° and 2° of Article L. 533-25 within an investment firm benefiting from exceptional public financial support. Variable remuneration paid to persons other than those mentioned in 1° and 2° of Article L. 533-25 by an investment firm benefiting from exceptional public financial support is limited to a percentage of net income when it is not compatible with its ability…

Where performance is taken into account, the variable remuneration granted and paid to the categories of staff referred to in Article L. 533-30 shall be determined on the basis of a combined assessment of the individual performance of the person concerned, the performance of his business unit and the overall results of the investment firm. The measurement of performance shall take into account the risks to which the investment firm…

Payments linked to the early termination of an employment contract must correspond to effective performance assessed over time and not reward failure or fault. Global remuneration linked to compensation or buy-outs of previous employment contracts must be consistent with the long-term interests of the investment firm.

The allocation of variable components of total remuneration within the investment firm takes account of all the risks to which it is or is likely to be exposed.

Within investment firms of significant importance in relation to their size and in accordance with criteria relating to the level of remuneration of the individual, at least half of the variable remuneration shall be allocated in the form of one of the following instruments: 1° Shares or equivalent property rights, depending on the legal structure of the investment firm; 2° Equity-linked instruments or equivalent non-cash instruments, depending on the legal…

In investment firms of significant importance in terms of their size and according to criteria relating to the level of remuneration of the individual, the payment of a portion at least equal to 40% of the variable part of the total remuneration is deferred for a period of three to five years. The duration of the deferral is set taking into account the length of the investment firm’s business cycle,…

By way of derogation fromarticle L. 1331-2 of the French Labour Code, the total amount of variable remuneration may, in whole or in part, be reduced or give rise to restitution where the financial results of the investment firm are mediocre or negative and in particular where the person concerned has disregarded the rules laid down by the investment firm with regard to risk-taking, in particular because of his responsibility…