UAE introduces new deferred remuneration requirements for banks and insurers

Banks, insurance companies and reinsurance companies regulated by the Central Bank of the UAE (CBUAE) are preparing for new requirements governing the funding, structure and delivery of variable remuneration. 

The CBUAE’s Remuneration Regulation for Banks and Insurance Companies (Circular No. 5/26) came into effect on 14 April 2026. It introduces a more prescriptive approach to the relationship between remuneration, risk and long-term performance.

Under the new requirements, at least 40% of variable remuneration for Material Risk Takers must be deferred for a minimum of three years. For Senior Material Risk Takers, this increases to at least 60% over a minimum of five years. At least 50% of variable remuneration awarded to Material Risk Takers must also be delivered through shares, share-linked instruments or equivalent non-cash instruments. Firms must also have appropriate malus and clawback mechanisms in place.

James Barber-Lomax TEP, Group Head of Pensions & Employer Solutions, said the changes have implications beyond remuneration policy, as affected firms must submit a gap assessment and remediation plan to the Central Bank by 11 October 2026, with full implementation required by 14 July 2027.“The changes have implications beyond reward policy - organisations may need to review their employment documentation, incentive plans, governance arrangements, malus and clawback provisions, and the mechanisms used to hold and deliver deferred awards,” he said.

How Praxis can support

An appropriately structured trust can provide an independent mechanism through which deferred cash and share-based awards are funded, held and administered. 

Praxis has more than ten years’ experience providing employer solutions for institutional clients through its ADGM-licensed trust company and can work alongside an organisation’s legal and remuneration advisers to establish an appropriate trust structure and acting as independent trustee and administrator in the UAE. 

To discuss your requirements, contact James Barber-Lomax or a member of our pensions and employer solutions team.  

Praxis is the brand name for PraxisIFM Group Limited and all its subsidiaries and associated companies. PraxisIFM Trust Limited is authorised and regulated by the Financial Services Regulatory Authority in Abu Dhabi Global Market.