Firms that are subject to the FSA remuneration code may be interested in the FSA consultation on the position of “buy out” awards, which generally applies where a firm hires a new member of staff and seeks to “buy out” an existing award of a deferred variable remuneration made by the previous employer.

The draft guidance provides that although the FSA does not encourage buy out awards, the FSA will not consider buy out awards to breach the remuneration code generally where they are not more generous than that awarded or offered by the previous employer and where they are subject to appropriate performance adjustment requirements.

Further reading

The FSA webpage relating to the consultation on “buy out” awards

Nabarro briefing on the remuneration code