State aid to banks (IVOR nr. 109) 2018/11.4.3.1:11.4.3.1 The aim of the remuneration restrictions

State aid to banks (IVOR nr. 109) 2018/11.4.3.1

11.4.3.1 The aim of the remuneration restrictions

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A prime observation is that the remuneration restrictions are sometimes aimed at corporate governance, sometimes at cost-cutting and sometimes at both. To give an example, in the decisions on the four large Greek banks1, the restrictions on remuneration are mentioned in two contexts: in the context of corporate governance and in the context of a cost-cutting programme. This can be illustrated by recitals 140 and 346 of the decision on Piraeus Bank. In recital 140, the restrictions of the remuneration are presented as a corporate governance measure:

“Greece gave a number of commitments related to the corporate governance of the Bank. It committed to limit the remuneration of the Bank’s employees and managers”.2

In recital 346, the restrictions of the remuneration are presented as a cost-cutting measure:

The Bank has also engaged in a far-reaching cost reduction programme, as indicated in section 2.4.2. Its costs will further decrease until 2017. Its workforce is being reduced and salaries adjusted downwards. Greece has also committed to limit the remuneration of the Bank’s managers, […]”.3

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