FSA shakes up reward and recognition rules

Date: 03/08/2010

The Financial Services Authority (FSA) has suggested revisions to its Remuneration Code as it continues its drive toward effective risk management.

Under the amended rules, a large proportion of employees' reward and recognition packages will have to be deferred and the value of any payouts will have to be tied to a number of risk adjustment measures.

More than 2,500 firms are expected to be affected by the new Remuneration Code, including banks, building societies, asset management firms and a number of venture capital organisations.

Firms will have to comply with different aspects of the FSA's reward and recognition rules dependent on their size and the complexity of their activities and risks.

Commenting on the new incentive rules from the FSA, Tom Gosling, reward partner at PricewaterhouseCoopers, said: "Aligning the various international remuneration regulations has been no easy feat and it is likely that certain aspects of the remuneration code will be up for further review."

"However, the extension of the code in some form to many additional firms risks putting those affected organisations at a competitive disadvantage," he added.

International drug manufacturer and distributor GSK recently overhauled its sales incentive programs.

Written by Michael Ewing ADNFCR-2060-ID-800011159-ADNFCR

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FSA shakes up reward and recognition rules

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