Directive (EU) 2019/2034

In force

This text since 24 Dec 2024law://eu/dir/2019/2034/art_30__para_1@2026-11-12

Contents

1.Member States shall ensure that investment firms, when establishing and applying their remuneration policies for categories of staff, including senior management, risk takers, staff engaged in control functions and any employees receiving overall remuneration equal to at least the lowest remuneration received by senior management or risk takers, whose professional activities have a material impact on the risk profile of the investment firm or of the assets that it manages, comply with the following principles:

(a)the remuneration policy is clearly documented and proportionate to the size, internal organisation and nature, as well as to the scope and complexity of the activities of the investment firm;

(b)the remuneration policy is a gender‐neutral remuneration policy;

(c)the remuneration policy is consistent with and promotes sound and effective risk management;

(d)the remuneration policy is in line with the business strategy and objectives of the investment firm, and also takes into account long term effects of the investment decisions taken;

(e)the remuneration policy contains measures to avoid conflicts of interest, encourages responsible business conduct and promotes risk awareness and prudent risk taking;

(f)the investment firm’s management body in its supervisory function adopts and periodically reviews the remuneration policy and has overall responsibility for overseeing its implementation;

(g)the implementation of the remuneration policy is subject to a central and independent internal review by control functions at least annually;

(h)staff engaged in control functions are independent from the business units they oversee, have appropriate authority, and are remunerated in accordance with the achievement of the objectives linked to their functions, regardless of the performance of the business areas they control;

(i)the remuneration of senior officers in the risk management and compliance functions is directly overseen by the remuneration committee referred to in Article 33 or, where such a committee has not been established, by the management body in its supervisory function;

(j)the remuneration policy, taking into account national rules on wage setting, makes a clear distinction between the criteria applied to determine the following:

(i)basic fixed remuneration, which primarily reflects relevant professional experience and organisational responsibility as set out in an employee’s job description as part of his or her terms of employment;

(ii)variable remuneration, which reflects a sustainable and risk adjusted performance of the employee, as well as performance in excess of the employee’s job description;

(k)the fixed component represents a sufficiently high proportion of the total remuneration so as to enable the operation of a fully flexible policy on variable remuneration components, including the possibility of paying no variable remuneration component.

Source: EUR-Lex, © European Union, 1998-2026. Reuse authorised under Decision 2011/833/EU.

Key facts

Type: Directive · (EU) 2019/2034 · EEA relevant
Adopted: 27 Nov 2019
In force: 25 Dec 2019
Text current to: 24 Dec 2024
Made by: Council of the European Union, European Parliament
Official: EUR-Lex 32019L2034 · ELI

Topics

capital market disclosure of information financial control financial legislation financial supervision investment company private-sector liquidity Approximation of laws Financial provisions Freedom of establishment

History · 1 version

24 Dec 2024Reading

Connections

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Amends 2: Directive 2014/65/EU6 provisions; Directive 2013/36/EU19 provisions
Repeals 1: Directive 2013/36/EU14 provisions
Cited by 10: this act9 provisions; Directive (EU) 2024/2994; Regulation (EU) 2023/28592 provisions; Regulation (EU) 2026/808; Commission Delegated Regulation (EU) 2026/4404 provisions; Commission Implementing Regulation (EU) 2021/22842 provisions; Decision (EU) 2025/451 (ECB/2025/7); Commission Delegated Regulation (EU) 2025/418; Max Heinr. Sutor OHG v Single Resolution Board (T-393/21)2 provisions; Commission Implementing Regulation (EU) 2024/7962 provisions

Defined terms · 36

Show every defined term

ancillary services undertaking
means an undertaking, the principal activity of which consists of owning or managing property, managing data‐processing services, or a similar activity which is ancillary to the principal activity of one or more investment firms;
authorisation
means authorisation of an investment firm in accordance with Article 5 of Directive 2014/65/EU;
branch
means a branch as defined in point (30) of Article 4(1) of Directive 2014/65/EU;
CCP
means a CCP as defined in Article 2, point (1), of Regulation (EU) No 648/2012 of the European Parliament and of the Council;
close links
means close links as defined in point (35) of Article 4(1) of Directive 2014/65/EU;
commodity and emission allowance dealer
means a commodity and emission allowance dealer as defined in point (150) of Article 4(1) of Regulation (EU) No 575/2013;
competent authority
means a public authority or body of a Member State that is officially recognised and empowered by national law to supervise investment firms in accordance with this Directive, as part of the supervisory system in operation in that Member State;
compliance with the group capital test
means compliance by a parent undertaking in an investment firm group with the requirements of Article 8 of Regulation (EU) 2019/2033;
consolidated situation
means a consolidated situation as defined in point (11) of Article 4(1) of Regulation (EU) 2019/2033;
control
means the relationship between a parent undertaking and a subsidiary, as described in Article 22 of Directive 2013/34/EU of the European Parliament and of the Council, or in the accounting standards to which an investment firm is subject under Regulation (EC) No 1606/2002 of the European Parliament and of the Council, or a similar relationship between any natural or legal person and an undertaking;
credit institution
means a credit institution as defined in point (1) of Article 4(1) of Regulation (EU) No 575/2013;
derivatives
means derivatives as defined in point (29) of Article 2(1) of Regulation (EU) No 600/2014 of the European Parliament and of the Council;
financial institution
means a financial institution as defined in point (14) of Article 4(1) of Regulation (EU) 2019/2033;
gender neutral remuneration policy
means gender neutral remuneration policy as defined in point (65) of Article 3(1) of Directive 2013/36/EU, as amended by Directive (EU) 2019/878 of the European Parliament and of the Council;
group
means a group as defined in point (11) of Article 2 of Directive 2013/34/EU;
group supervisor
means a competent authority responsible for the supervision of compliance with the group capital test of Union parent investment firms and investment firms controlled by Union parent investment holding companies or Union parent mixed financial holding companies;
home Member State
means a home Member State as defined in point (55)(a) of Article 4(1) of Directive 2014/65/EU;
host Member State
means a host Member State as defined in point (56) of Article 4(1) of Directive 2014/65/EU;
initial capital
means the capital which is required for the purposes of authorisation as an investment firm, the amount and type of which are specified in Articles 9 and 11;
investment firm
means an investment firm as defined in point (22) of Article 4(1) of Regulation (EU) 2019/2033 of the European Parliament and of the Council which is subject to the initial capital requirement laid down in Article 9(1) of Directive (EU) 2019/2034 of the European Parliament and of the Council.
investment firm group
means an investment firm group as defined in point (25) of Article 4(1) of Regulation (EU) 2019/2033;
investment holding company
means an investment holding company as defined in point (23) of Article 4(1) of Regulation (EU) 2019/2033;
investment services and activities
means investment services and activities as defined in point (2) of Article 4(1) of Directive 2014/65/EU;
management body
means a management body as defined in point (36) of Article 4(1) of Directive 2014/65/EU;
management body in its supervisory function
means the management body acting in its role of overseeing and monitoring management decision‐making;
mixed financial holding company
means a mixed financial holding company as defined in point (15) of Article 2 of Directive 2002/87/EC of the European Parliament and of the Council;
mixed‐activity holding company
means a parent undertaking other than a financial holding company, an investment holding company, a credit institution, an investment firm, or a mixed financial holding company within the meaning of Directive 2002/87/EC, the subsidiaries of which include at least one investment firm;
parent undertaking
means a parent undertaking as defined in point (32) of Article 4(1) of Directive 2014/65/EU;
QCCP
means a ‘qualifying central counterparty’ or ‘QCCP’ as defined in Article 4(1), point (88), of Regulation (EU) No 575/2013.
sectoral rules
means Union legal acts relating to the prudential supervision of regulated entities, in particular Regulations (EU) No 575/2013 and (EU) 2019/2033 of the European Parliament and of the Council and Directives 2009/138/EC, 2013/36/EU, 2014/65/EU and (EU) 2019/2034 of the European Parliament and of the Council.
senior management
means senior management as defined in point (37) of Article 4(1) Directive 2014/65/EU;
subsidiary
means a subsidiary as defined in point (33) of Article 4(1) of Directive 2014/65/EU;
systemic risk
means systemic risk as defined in point (10) of Article 3(1) of Directive 2013/36/EU;
Union parent investment firm
means a Union parent investment firm as defined in point (56) of Article 4(1) of Regulation (EU) 2019/2033;
Union parent investment holding company
means a Union parent investment holding company as defined in point (57) of Article 4(1) of Regulation (EU) 2019/2033;
Union parent mixed financial holding company
means a Union parent mixed financial holding company as defined in point (58) of Article 4(1) of Regulation (EU) 2019/2033;

Defined terms · 36

Show every defined term

ancillary services undertaking
means an undertaking, the principal activity of which consists of owning or managing property, managing data‐processing services, or a similar activity which is ancillary to the principal activity of one or more investment firms;
authorisation
means authorisation of an investment firm in accordance with Article 5 of Directive 2014/65/EU;
branch
means a branch as defined in point (30) of Article 4(1) of Directive 2014/65/EU;
CCP
means a CCP as defined in Article 2, point (1), of Regulation (EU) No 648/2012 of the European Parliament and of the Council;
close links
means close links as defined in point (35) of Article 4(1) of Directive 2014/65/EU;
commodity and emission allowance dealer
means a commodity and emission allowance dealer as defined in point (150) of Article 4(1) of Regulation (EU) No 575/2013;
competent authority
means a public authority or body of a Member State that is officially recognised and empowered by national law to supervise investment firms in accordance with this Directive, as part of the supervisory system in operation in that Member State;
compliance with the group capital test
means compliance by a parent undertaking in an investment firm group with the requirements of Article 8 of Regulation (EU) 2019/2033;
consolidated situation
means a consolidated situation as defined in point (11) of Article 4(1) of Regulation (EU) 2019/2033;
control
means the relationship between a parent undertaking and a subsidiary, as described in Article 22 of Directive 2013/34/EU of the European Parliament and of the Council, or in the accounting standards to which an investment firm is subject under Regulation (EC) No 1606/2002 of the European Parliament and of the Council, or a similar relationship between any natural or legal person and an undertaking;
credit institution
means a credit institution as defined in point (1) of Article 4(1) of Regulation (EU) No 575/2013;
derivatives
means derivatives as defined in point (29) of Article 2(1) of Regulation (EU) No 600/2014 of the European Parliament and of the Council;
financial institution
means a financial institution as defined in point (14) of Article 4(1) of Regulation (EU) 2019/2033;
gender neutral remuneration policy
means gender neutral remuneration policy as defined in point (65) of Article 3(1) of Directive 2013/36/EU, as amended by Directive (EU) 2019/878 of the European Parliament and of the Council;
group
means a group as defined in point (11) of Article 2 of Directive 2013/34/EU;
group supervisor
means a competent authority responsible for the supervision of compliance with the group capital test of Union parent investment firms and investment firms controlled by Union parent investment holding companies or Union parent mixed financial holding companies;
home Member State
means a home Member State as defined in point (55)(a) of Article 4(1) of Directive 2014/65/EU;
host Member State
means a host Member State as defined in point (56) of Article 4(1) of Directive 2014/65/EU;
initial capital
means the capital which is required for the purposes of authorisation as an investment firm, the amount and type of which are specified in Articles 9 and 11;
investment firm
means an investment firm as defined in point (22) of Article 4(1) of Regulation (EU) 2019/2033 of the European Parliament and of the Council which is subject to the initial capital requirement laid down in Article 9(1) of Directive (EU) 2019/2034 of the European Parliament and of the Council.
investment firm group
means an investment firm group as defined in point (25) of Article 4(1) of Regulation (EU) 2019/2033;
investment holding company
means an investment holding company as defined in point (23) of Article 4(1) of Regulation (EU) 2019/2033;
investment services and activities
means investment services and activities as defined in point (2) of Article 4(1) of Directive 2014/65/EU;
management body
means a management body as defined in point (36) of Article 4(1) of Directive 2014/65/EU;
management body in its supervisory function
means the management body acting in its role of overseeing and monitoring management decision‐making;
mixed financial holding company
means a mixed financial holding company as defined in point (15) of Article 2 of Directive 2002/87/EC of the European Parliament and of the Council;
mixed‐activity holding company
means a parent undertaking other than a financial holding company, an investment holding company, a credit institution, an investment firm, or a mixed financial holding company within the meaning of Directive 2002/87/EC, the subsidiaries of which include at least one investment firm;
parent undertaking
means a parent undertaking as defined in point (32) of Article 4(1) of Directive 2014/65/EU;
QCCP
means a ‘qualifying central counterparty’ or ‘QCCP’ as defined in Article 4(1), point (88), of Regulation (EU) No 575/2013.
sectoral rules
means Union legal acts relating to the prudential supervision of regulated entities, in particular Regulations (EU) No 575/2013 and (EU) 2019/2033 of the European Parliament and of the Council and Directives 2009/138/EC, 2013/36/EU, 2014/65/EU and (EU) 2019/2034 of the European Parliament and of the Council.
senior management
means senior management as defined in point (37) of Article 4(1) Directive 2014/65/EU;
subsidiary
means a subsidiary as defined in point (33) of Article 4(1) of Directive 2014/65/EU;
systemic risk
means systemic risk as defined in point (10) of Article 3(1) of Directive 2013/36/EU;
Union parent investment firm
means a Union parent investment firm as defined in point (56) of Article 4(1) of Regulation (EU) 2019/2033;
Union parent investment holding company
means a Union parent investment holding company as defined in point (57) of Article 4(1) of Regulation (EU) 2019/2033;
Union parent mixed financial holding company
means a Union parent mixed financial holding company as defined in point (58) of Article 4(1) of Regulation (EU) 2019/2033;