Pillar 3 Disclosure Requirements for Remuneration

In July 2009, as part of its Enhancements to the Basel II framework, the Basel Committee on Banking Supervision introduced supplemental Pillar 2 guidance to address a number of risk management weaknesses revealed during the financial crisis that began in 2007. In this context, the Committee notably incorporated within Pillar 2 the Financial Stability Board’s Principles for Sound Compensation Practices, which were issued in April 2009 to improve compensation practices and strengthen supervision in this area. Paragrapah 94 of the supplemental Pillar 2 guidance included the principle that “Firms must disclose clear, comprehensive and timely information about their compensation practices to facilitate constructive engagement by all stakeholders, including in particular shareholders”.