Consistency of the current remuneration policy with a long-term increase in shareholder value and stability of the Bank's is best guaranteed by "Principles of the variable components of the remuneration of persons holding managerial positions at the Bank" and issued on the basis of regulations of the variable components of remuneration binding for existing key managers with a high impact on the risk profile of the Bank ( MRT), including members of the Board.
The rules indicate that the assigned to MRT goals are to ensure the inclusion of the business cycle of the Bank and the risks associated with the ongoing operations. The risk is taken into account by both determining appropriate risk-sensitive criteria for performance evaluation and reduction of bonus or even lack of it in case of degraded performance or financial losses of the Bank (including the use of malus with respect to deferred for three years part of the variable remuneration).
- motivation for the quality work and the right attitude that help Bank to achieve the best, stable financial results in the long run,
- supporting sound and effective risk management and discouraging excessive risk-taking beyond acceptable level,
- supporting the implementation of the business strategy and the reduction of conflict of interest.
Criteria for evaluation of the objectives by the person holding the position of MRD, including a member of the Board shall include i.a.:
- the impact on regulatory capital, total capital ratio and equity of the Bank so that the payment of variable remuneration does not limit possibilities to strengthen them,
- result of the Bank under the responsibility of the individual, taking into account the outcomes of the Bank.
In the design of the structure of efficiency measures different types of KPIs are summarized, in particular quantitative and effectiveness indicators resulting from owned data system, and consistent with the specifics of the organization. All efficiency measures are parameterized and are measurable. Due to the nature of the given position, the proportion of different share of the different levels of the evaluation is determined as well as the weights according to types of KPIs. Responsibility for long-term financial performance adjusted for risk and costs is used with different design depending on the specific tasks.
The Supervisory Board in relation to the members of the Board and the Management Board in relation to people in leadership positions can also decide prior to each payment of variable remuneration whether to proportionally reduce the amount of funds for the salaries taking into account:
- the impact on regulatory capital, the total capital ratio and equity of the Bank, so that the payment of variable remuneration does not limit possibilities to strengthen them,
- the impact on the cost of capital so the payment of variable remuneration does not restrict the possibility of providing an adequate capital base
- desired risk profile of the Bank,
- financial results of the Bank in relation to the long-term development plans.
50% of MRT’s any variable remuneration component (partly deferred and non-deferred) is associated with the value of the phantom shares based on the share price of the Bank changing over time. As a result, each of the MRTs is involved in work to raise the value of the Bank's shares, thus acting in return for the shareholders.
The Supervisory Board approves the Policy and periodically review these Terms. On the basis of this review and on the basis of reports of the Internal Audit Department on the implementation of the Rules, the Supervisory Board may recommend updating them. Past surveys and changes in the Rules and Regulations of the variable components of remuneration did not have the character that dramatically affects the main principles and tools of motivation system.
Regardless of the MRT incentive system, also the bonus targets of the remaining employees are linked to key management indicators of the Bank taken into account for the purposes of premium imposed on the individual units of the Bank. The principle of cascade included in the bonus rules, which is monitored for compliance purpose, requires assigning targets to workers employed under individual structures.
In addition, each object is placed in line with the SMART principle (S-specific, M-measurable, A-ambitious, R-real T-term), which is also subject to cyclical monitoring.