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Deferred Compensation according to CRD III - 2012/03
Norse Solutions is proud to announce full capability for handling deferred equity compensation, following the requirements set forth under the EU’s Capital Requirements Directive III, CRDIII (detailed below).
As a result, DNB Bank ASA and Gjensidige ASA, two of the largest financial institutions in the Nordic region, (further details below) are already using Norse Solutions for the efficient administration, reporting, accounting and disclosure of their deferred equity compensation following CRDIII.
President and CEO of Norse Solutions, Arne Peder Blix comments: “The need for an advanced and fully transparent system, enabling the client to get a complete overview of these rather sensitive compensation instruments became clear to us when we saw the early drafts of CRDIII. Being able to report with precision and to have transparency readily available to the various stakeholders and the public at large, and compliance with all forms of reporting and disclosure with complete confidence in the accuracy of the figures, is a “must have” for financial institutions. In the current climate, disclosures from such institutions are subject to scrutiny by regulators and the community as a whole. We are proud to once again be first in offering state-of-the-
About CRDIII, EU’s Capital Requirements Directive – pillar III
CRDIII introduced requirements for remuneration policies and specific details for variable remuneration in credit/financial institutions. Requirements of share-based deferred payment with performance criteria results in such arrangements being subject to IFRS-2 with regards to accounting and disclosure.
The requirement applies to categories of staff in credit institutions, including 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, whose professional activities have a material impact on their risk profile.
In general - with minor deviations between the countries, there shall be appropriate ratios between fixed and variable remuneration, where variable remuneration shall take into account all types of current and future risk. At least 50% of any variable remuneration shall consist of shares or equivalent ownership interests or equivalent non-cash instrument.
At least 40% of the variable remuneration component shall be deferred for at least 3 years, and vest no faster than on a pro-rata basis. Such instruments shall be subject to retention policy designed to align incentives with the longer-term interests of the credit institution. Clawback arrangements and performance criteria to align with the performance of the credit institution are also required.
These requirements will result in advanced share-based payment arrangements for high-income staff where there is need for advanced systems to handle the administration, accounting and disclosure in compliance with IFRS-2.
Read more about CRD III on our web pages: http://www.norse-
DNB is Norway's largest financial services group and one of the largest in the Nordic region in terms of market capitalisation. The Group is among the world’s leading banks within shipping, energy and seafood. The Group offers a full range of financial services, including loans, savings, advisory services, insurance and pension products for retail and corporate customers and the public sector (for more information please visit http://www.dnb.no).
Gjensidige is one of the leading insurance groups in the Nordic region. The Gjensidige group offers general insurance products in Norway, Sweden, Denmark and the three Baltic countries. In addition the group offers online retail banking, pension and savings products and health care services in Norway. Gjensidige also offers an Employee Share Saving Plan for employees in the group by using Norse Solutions’ software Norse Options™ (for more information please visit http://www.gjensidige.no).
About Norse Solutions
We believe that equity compensation is a necessary and strategic part of remuneration. We believe it drives entrepreneurship, increases focus on value creation and participation in companies - as well as in society as a whole. We help companies operate their share plans efficiently.
Norse Solutions has for over 10 years developed our software Norse Options and delivered services to ease the burden of Administration, Reporting, Accounting and Disclosure of equity compensation. Over this time we have continuously gained further knowledge and aptitude in the field, and today we have the longest experience in successfully handling compensation plans according to IFRS-2 and related standards (e.g. IAS 12 and IAS 33) in the world.
Norse Solutions is the largest independent supplier of software and services for the efficient Administration, Reporting, Accounting and Disclosure of share-based payment in Europe. Our Top Down architecture and background from accounting software, combined with unique reporting capabilities, put our software above and beyond that of our competitors. We offer Plan Administration and tailored outsourcing of all types of share-based payment to fit the needs of any given client, utilizing our competence and unique experience. For more information about Norse Solutions, please visit: http://www.norse-