Archive Sound Compensation | Deloitte Legal Germany

The regulatory requirements for the remuneration systems of credit institutions, financial services companies, capital management companies and insurance companies are constantly increasing. Regulated companies in the financial market are faced with the challenges of content and process-related issues that are necessary to ensure that remuneration systems conform to the rules and at the same time are designed in line with the needs of the market in terms of employment law, supervisory law, company law, accounting law and taxation expertise. In addition, legislation and auditing practice are determining increasingly complex requirements for external and internal audits of remuneration systems. At the same time, attractive remuneration systems are an essential instrument for employers to recruit, develop and retain their employees over the long term.

The sound compensation merry-go-round will continue to turn in 2025: On 22 August 2025, the German Federal Ministry of Finance (BMF) published the draft bill for the implementation of Directives (EU) 2024/1619 (CRD VI) and 2024/1174 (BRUBEG), and on 3 September 2025 (following the previous draft by the German Federal Ministry of Justice dated 23 June 2025), the German Federal Government published the draft law implementing Directive (EU) 2023/2225 on consumer credit agreements (VerbraucherkreditG). Both drafts also contain updates on remuneration systems and remuneration governance in institutions. In this Client Alert, we summarise the material changes to the German Ordinance for Remuneration systems in institutions (Institutsvergütungsverordnung, IVV) and the German Banking Act (Kreditwesengesetz, KWG) proposed in the drafts.

The final version of the German Ordinance on Remuneration Systems in Investment Firms (Wertpapier-Institutsvergütungsverordnung, WVV) was published in the Federal Law Gazette (Bundesgesetzblatt) on 11 January 2024.