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2018 Financial and Social Report

The Bank Millennium Group has in place a uniform Policy on the compensation of employees in the Bank Millennium Group, which articulates the assumptions used to shape the fixed and variable components of compensation. For employees identified as having material impact on the risk profile, the Rules for awarding and paying out variable compensation components for risk takers in the Bank Millennium Group, which define the criteria used to award bonuses and other conditions affecting the decisions to pay out bonuses.

Separate Policies for persons having material impact on the risk profile are in place within the framework of the Group’s Compensation Policy in the subsidiaries Millennium Dom Maklerski SA and Millennium Towarzystwo Funduszy Inwestycyjnych SA.

The Bank does its best for the compensation-related solutions not to create stimuli inclining people to engage in activities and take decisions that pose a threat to the Bank’s long-term welfare and transcend the acceptable risk profile and for them not to incline people to undertake actions at odds with the best interests of the Group’s clients and investors. [GRI 102-30]

This policy aims to provide a framework for shaping the compensation of all the Group’s employees from the perspective of corporate governance, institutional safety and the suitability of compensation to the Group’s standing, operating magnitude and growth potential.

Salary and position reviews are conducted in the Bank regularly. Pursuant to an assessment of the Group’s financial condition and its business environment, the Bank’s Management Board may make a decision to award a pool of funds to be used to modify employees’ base salaries. Salary levels are reviewed taking into account the periodic assessment of performance and skills and are compared with salary information presented in salary studies on the financial markets.

Policy of variable compensation components

The main source of income for employees in the Bank Millennium Group is their base salary resulting from their employment contract. Variable compensation is an additional motivational part of the overall compensation. The incentive mechanisms for the employees of sales units and other units involved in client service processes are devised in such a way that they do not lead to a conflict of interest or performance incentives that may incline Group employees to place their own interests or the firm’s interest first thereby creating a prospective loss for any Group client. [GRI 102-25]

An important part of this approach is a separate assessment for those in management positions, which encourages managers to pay special attention to the long-term welfare of the Bank and avoid excessive risk exposure. [GRI 102-11, 102-30]

Variable compensation is shaped using differentiated bonus systems whose purpose is to motivate employees to achieve their business and organizational plans. The bonus systems and periodic evaluation criteria in the Bank Millennium Group have been adapted to the specific nature of work performed by employees in the Group’s various areas.

The bonus pool amount depends on overall results and on the general condition of the Bank. Bonuses are paid out monthly in the Bank’s sales network and other head office units involved in the customer service of retail clients or quarterly for employees of the Bank’s head office.