Implementation of CRD V into Belgian law – Are banks’ remuneration policies and practices gender-neutral?


On 26 February 2021, the Council of Ministers approved a first reading of the draft law transposing certain EU directives into Belgian law, among which the fifth Capital Requirements Directive (CRD V). The latter entered into force in June 2019 and should have been transposed by Member States by 28 December 2020.

As a reminder, CRD IV contains requirements relating to (Identified) staff remuneration. In particular, CRD IV requires firms to have in place remuneration policies and practices that do not encourage or reward excessive risk-taking and sets out principles that apply to variable elements of remuneration. CRD IV sets out the “proportionality principle” that firms establishing and applying remuneration policies should do so in a manner and to the extent that is appropriate to their size, internal organisation and the nature, scope and complexity of their activities.

Among other things, CRD V amends CRD IV to allow firms to use share-linked instruments that track the value of shares to satisfy the CRD IV remuneration requirements. It also provides a derogation from the principles relating to deferral and pay-out in instruments for small firms and staff members whose annual variable remuneration does not exceed EUR 50.000 and does not represent more than one third of the staff member’s annual total remuneration. Firms benefiting from a derogation will be required to disclose that they benefit from that derogation, and on what basis. To be followed up whether or not Belgium will decide to deviate and not to apply such exemption.

A novelty introduced by CRD V is that remuneration policies and practices should be gender neutral. The EBA is mandated to provide guidelines on gender-neutral remuneration policies and issue a report within two years of the publication of the guidelines on the application of these policies by firms. For these purposes a “gender neutral” remuneration policy is a remuneration policy based on equal pay for male and female workers for equal work or work of equal value.

Over the past few years, a PwC dedicated team has been offering an independent and robust analysis of pay data as well as an audit of practices and policies in this area of gender pay using proven methodologies. If you are interested to learn about our expertise, please consult our website on the Equal-Salary Certification or contact Bart Van den Bussche.