The Central Bank (BDL) has issued a circular about remunerations and deferrals to banking sector employees. The circular covers any part- and full-time employees in local banks.

It defines remuneration as any kind of benefits, rewards, cash and non-cash bonuses, including salaries, allocations, and retirement compensations. Deferrals mean the rewards that should be paid later to a banking employee along with the period of achieving financial results.

Banks are requested to set a written remuneration policy to be approved by their board of directors. This policy should be reviewed periodically by the board, in order to make sure that that it is compatible with the bank’s strategy and operations development, according to the circular.

The bank’s board should create a 'Remuneration Committee' of the non-executive board members. There should be a minimum of three members for this group. The committee is headed by a chairman that should be an independent board member, who has experience regarding the evaluation of performance and remuneration, in addition to knowledge in the evaluation of related risks, mainly in the banking or financial sectors. The board should also determine the remuneration of the chairman and members of this committee.

The committee’s chairman is not allowed to grant those powers to a third party.

The circular states the framework of the committee. It must work closely with the bank’s Risk Management Committee.

The bank’s board has to set a written system to evaluate the employees’ performance. The bank should include details about the Remuneration Committee in its annual report and provide the BDL and the Banking Control Commission of Lebanon (BCCL) with relevant information and changes about that committee.

Banks should apply this circular by the end of December of this year.