Shareholder approval for a firm to increase the permitted ratio of fixed to variable remuneration

i. The percentage thresholds referred to in the second indent of Article 94(1)(g)(ii) of Directive 2013/36/EU (CRD) - the 50% representation threshold, and the 66% and 75% majority thresholds - should all be calculated by voting rights attached to the shares or other ownership rights in the firm. These are the voting rights capable of being cast on the relevant resolution (see also point (iv)). While the second indent of Article 94(1)(g)(ii) of the CRD refer to shareholders, it is clear that CRD requires the percentages to be counted by reference to the shareholders or owners voting rights and not the number of natural persons who are shareholders or owners. Under the company law in some Member States it may be established that each owner has just one voting right, independent of the percentage of capital he or she holds. ii. As per point (i) the 75% threshold, which applies when fewer than 50% of shares are represented in the vote and the 66% threshold, which applies when at least 50% of shares are represented, are calculated in relation to the shareholders or owners voting rights that are represented, and not the number of natural persons who are shareholders or owners (which would reflect a firm's whole issued share capital or ownership rights - including specific issuances which may not have any voting rights). iii. The concept of shares or ownership rights being "represented" is not defined by the CRD; it depends on the legal nature of the firm in question and national company law. In general "represented" should be understood as being put in a position which would have enabled the shareholder or owner to vote on the proposed higher ratio, independent of how such a vote is taken. In line with this principle and taking into account national company law firms should set their internal policies as to which forms of conduct will constitute being represe nted for the purpose of this vote. Furthermore, without prejudice to national law, it should be noted that to determine what proportion of the share/ownership rights is "represented" as required by CRD, a poll vote should actually take place at the relevant shareholder meeting (even if the outcome of such a vote may appear obvious from a show of hands and/or any proxies received). In line with the applicable company law, firms should make it clear to shareholders/owners how each form of conduct (voting for or against, sending a proxy, abstaining, attending but not voting etc.) will be treated for the purpose of being represented. The meaning of being "represented" is the same for the threshold test (i.e. the 50% test) as for the majority test (i.e. the 66% or 75% test). Voting results should be duly documented and disclosed. iv. According to the last indent of Article 94(1)(g)(ii) of the CRD, staff who are directly concerned by the higher maximum levels of variable remuneration are not permitted to exercise any voting rights they may have. Accordingly, their voting rights should be disregarded when calculating the percentages, both in the nominator and the denominator. Where national company laws set out higher thresholds than those laid down in the second indent of Article 94(1)(g)(ii) of the CRD, these higher thresholds should apply.