The annual variable remuneration is divided into two equal parts:
•the immediately payable portion amounting to 50 per cent of the total annual variable remuneration awarded, which is paid in
cash;
•the deferred portion amounting to 50 per cent of the total annual variable remuneration is allocated in the Bank's shares. The
award of this portion of the remuneration is deferred for a period of 3 years from the date of award of the annual variable
remuneration until the grant of the deferred portion, taking into account the potential risks related to the results of the annual
assessment of the employee. The deferred portion for the Nominated Employee shall be approved annually, in proportion to
the achievement of his/her targets, or shall not be approved (where the targets are not achieved, i.e. when the qualitative
criterion is not reached), even in the case when the financial indicators of the Bank have been achieved. Where the
Nominated Employee or the Bank exceed the set targets, the deferred portion awarded can’t be increased, except for ex-post
adjustments related to share-related events or changes in taxation. Sufficient grounds for adjusting (reducing or not paying)
the deferred portion awarded to a particular Nominated Employee may include ex-post risk adjustments and ex-post
adjustments related to the activities of the Nominated Employee.
The achievement of annual targets is assessed on the basis of qualitative and quantitative criteria. Account is taken not only of the
employee’s personal financial performance, but also of his/her non-financial/non-quantitative inputs, i.e. relations with customers,
colleagues, compliance with standards, compliance with internal rules of procedure, policies and procedures, compliance with
requirements, initiative, responsibility, his/her following of the values of the Bank, performance improvement, etc. The determined
annual variable remuneration for employees is linked to the risk assumed by the unit / employee and the performance of the Group, the
Group company and the unit / employee. The criteria for calculating annual variable remuneration and target proportions are affected by
position and responsibilities, effect on performance, current and future risk exposure.
In determining / calculating the amount of annual variable remuneration for Nominated Employees, the correlation between the
performance of the Group, the risks taken and the remuneration is ensured through the application of the ex-ante risk assessment
principle, i.e. the assessment covers the current and potential future risks which arise from or are directly related to the payment of the
annual variable remuneration. The ex-ante assessment of annual variable remuneration is based on the assessment of quantitative and
qualitative criteria. Quantitative criteria – means the capital and liquidity ratios set out in the approved Risk Appetite Statement;
qualitative criteria – means business continuity risk management indicators. The determination / calculation of ex-ante annual variable
remuneration amount takes into account the performance and the long-term strategy of the Group and seeks to curb the incentive for
employees to take risks in excess of the level acceptable to the Group. The ex-ante assessment of annual variable remuneration
analyses whether the amount of the annual variable remuneration is compatible with the main strategic priorities of the Group, its
balanced short-term and long-term business objectives and the risk appetite accepted to achieve the objectives. The purpose is to
achieve that the amount of annual variable remuneration is sustainable, taking into account the financial position of the Group.
Variable remuneration payments related to employment termination are determined based on the employee’s performance within a
period established by the Bank or the Group; they are determined in such a way that an employee is not remunerated where his/her
activity resulted in losses to the Bank or the Group, except for statutory payments under the law. No options to recover any variable
remuneration paid to an employee are provided for.
Information on performance assessment criteria that form the basis for entitlement to shares, options or variable
remuneration portions. Main criteria and reasons of the system of variable remuneration elements and other non-monetary
benefits
The payment of deferred annual variable remuneration in the Group applies only to the Nominated Employees whose professional
activity has a significant effect on the nature of the risk profile of the establishment (Group). Annual variable remuneration, including the
immediately payable portion and the deferred portion, may be paid and/or awarded only provided the Bank is in a sound financial
position, after the measures of risk-based ex-ante adjustment of annual variable remuneration have been applied (where applicable)
and without prejudice to the requirements of the law. Annual variable remuneration must be reduced or not paid at all, if the
performance of the Group fails to meet the indicators set out in the strategy, or where losses are recorded, where the Nominated
Employee has acted in bad faith or where his/her actions resulted in a loss to the Bank or the Group. The entitlement to the Bank’s
shares as a portion of variable remuneration shall be based on the same performance assessment criteria as apply to the cash portion.
The deferred portion of annual remuneration in the form of the Bank’s shares shall be awarded and granted upon the expiry of the
deferment period in accordance with the option transaction (option agreement) between the Bank and the Nominated Employee
whereby the Bank grants the Nominated Employee the right to acquire the Bank’s shares free of charge upon the expiry of the
deferment period.
Employees are prohibited from personally ensuring themselves under insurance strategies or by taking out insurance cover against a
decrease of their variable remuneration in order to mitigate the risk determined through the application of the principles for calculating
their variable remuneration.
Amounts of payments related to employment termination / end of term in office and notice periods in the Group are determined based
on the statutory amounts of such payments and / or the duration of such notice periods established in the laws. The Bank has
agreements with most of the Board members (Board members also hold other positions at the Bank under contracts of employment)
that upon termination of an employment relationship with a Board member who also holds another position at the Bank, the Bank shall
pay a one-time compensation in the amount of the monthly official remuneration for 12 months.