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2018 Financial and Social Report

The Bank Millennium Group has a common „Employee Remuneration Policy in the Bank Millennium SA Group”, which formulates the assumptions used while determining the fixed and variable remuneration components for all employees of the Group. The expanded Policy contains both the binding principles from the earlier „Remuneration Policy for Persons Holding Managerial Positions in the Bank Millennium Group”, as well as those applied to the remaining groups of employees.

For employees identified as having a material impact on the risk profile (risk takers) the scheme of awarding and paying the bonus is additionally regulated by the document: „The Rules for Granting and Paying Variable Remuneration Components for Risk Takers at the Bank Millennium Group”.

On the basis of the Group’s policy, due to regulatory requirements – Millennium Dom Maklerski and TFI Millennium prepared own policies which strictly refer to the rules adopted by the Bank for the Group. According to the policy the main source of employee income is base salary resulting from the employment agreement. Variable remuneration is an additional, motivating element of the total remuneration package.

An employee’s base salary is adjusted to tasks implemented in a given organisational unit, scope of responsibility, qualifications, impact on the company’s risk profile and based on analysing pay information presented in payroll surveys on the financial market.

Cyclical reviews of remuneration and positions take place at the Bank. Based on the assessment of the Group’s financial condition and business environment the Bank’s Management Board may decide to allocate a pool of funds intended for changing base salaries of employees. Remuneration levels are verified taking into account the periodic appraisal of work performance, skills and are compared with market pay information.

Variable remuneration is determined as part of diversified bonus systems intended to incentivise employees to carry out business and organisational plans. Bonus systems and criteria of periodic appraisal at the Bank Millennium Group are adapted to the specifics of the employees’ activities in particular areas of the Group. The amount of bonus budgets awarded for bonus payment is determined on the basis of the degree of implementation of the total net profit plan for the Bank Millennium Group and in the case of business line employees – implementation of particular line targets. It is assumed that individual bonuses cannot exceed 100% of the total annual base salary. Bonuses are awarded as part of the bonus pool on the basis of the appraisal of work quality and degree of dedication to the implementation of the targets for particular employees.

The Bank Millennium Group attaches importance to the appropriate remuneration of persons holding managerial positions – making sure that decisions taken with respect to such persons motivate them to take care of the long-term interest of the Bank and avoid excessive exposure to risk.

The remuneration policy with respect to this group of employees is described in more detail in Capital Adequacy, Risk, Remuneration Policy Report of Bank Millennium Capital Group as at 31 December 2018.

The individual remuneration of risk takers, including Management Board Members, must not exceed the adopted percentage-based reference level (currently 100%) with respect to the total annual base salary. Moreover, the pool intended for variable remuneration components of Bank Millennium’s Management Board Members must not exceed the share – established by the Supervisory Board – in the consolidated net profit of the Bank Millennium Group (currently 2%).

The annual bonus pool for persons holding managerial positions is allocated after prior analysis of the Bank’s situation with respect to

  • Achieved business results: net profit, result on banking activity, cost to income ratio, return on equity (ROE);
  • liquidity: loan/deposit ratio, value of liquid assets;
  • capital adequacy ratios with respect to the KNF reference level.

Management Board Remuneration

Establishing the terms of contracts and remuneration for Management Board Members is a prerogative of the Supervisory Board. The Personnel Committee of the Supervisory Board handles matters relating to the principles of remuneration and the amount of remuneration of Management Board Members.

The total remuneration of Management Board Members consists of two parts: fixed and variable. The variable part of the remuneration can be the annual bonus, which depends on the Bank’s result compared to the annual budget, result compared to peer banks and the Management Board Member’s individual evaluation by the Personnel Committee.

Decisions relating to granting bonuses to Management Board Members are taken by the Personnel Committee of Supervisory Board after having analysed the results with the inclusion of the financial criteria:

  • implementation of planned budgets and ratios established for the managed activity area,
  • comparison with competitive banks of similar size,
  • business market criteria established for a given period;

and non-financial criteria, in particular:

  • overall quality of management in the responsibility area,
  • effective leadership and contribution to the Bank’s development,
  • management and supervision over the units in the responsibility area.

Members of the Supervisory Board receive exclusively fixed remuneration for their work in Board meetings and Committees which is adequate to the function performed by them and scale of activity of the Bank Millennium Group.

The total remuneration of Members of the Management Board for performing this function in 2018 was PLN 9,713.05 thousand. Additionally, Members of the Board were paid part of an annual bonus for 2014, 2015, 2016 and 2017 years (in the form of cash and phantom shares) as well as additional benefits.

Fixed remuneration for the membership of Management Board paid to the Members in 2018 (in PLN thousand)
Name Period Fixed Remuneration
Joao Bras Jorge 01.01.2018 – 31.12.2018 2 224.55
Fernando Bicho 01.01.2018 – 31.12.2018 1 620.00
Wojciech Haase 01.01.2018 – 31.12.2018 1 320.00
Andrzej Gliński 01.01.2018 – 31.12.2018 1 320.00
Wojciech Rybak 01.01.2018 – 31.12.2018 1 320.00
Maria Campos 01.01.2018 – 20.04.2018 440.00
Antonio Pinto Junior 20.04.2018 – 31.12.2018 918.50
Jarosław Hermann 01.08.2018 – 31.12.2018 550.00
Additional benefits of Management Board Members in 2018 (in PLN thousand)
Name Period Benefits
Joao Bras Jorge 01.01.2018 – 31.12.2018 1 027.23
Fernando Bicho 01.01.2018 – 31.12.2018 74.35
Wojciech Haase 01.01.2018 – 31.12.2018 13.31
Andrzej Gliński 01.01.2018 – 31.12.2018 25.07
Wojciech Rybak 01.01.2018 – 31.12.2018 3.83
Maria Campos 01.01.2018 – 20.04.2018 114.60
Antonio Pinto Junior 20.04.2018 – 31.12.2018 679.91
Jarosław Hermann 01.08.2018 – 31.12.2018 2.80

The additional benefits are mainly connected with accommodation of foreign members of the Management Board and healthcare benefits.

Variable remuneration paid in 2018 to Management Board Members and to persons who performed this function in prior years (in PLN thousand)
Awards paid (for the years 2014, 2015, 2016 and 2017)
Name In cash In phantom shares
Joao Bras Jorge 968.40 1 084.77
Fernando Bicho 730.00 817.68
Wojciech Haase 605.00 677.73
Andrzej Gliński 538.20 603.00
Wojciech Rybak 388.10 433.28
Maria Campos 605.00 677.73
Artur Klimczak 75.60 79.39
Michał Gajewski 33.20 39.84
Julianna Boniuk-Gorzelańczyk 58.80 61.75

 

In the period from 01.01.2018 to 31.12.2018 a provision was established for annual bonus in the amount of PLN 8,940.00  thousand.

 

The decision to award variable remuneration to Management Board Members for 2018 shall be taken by the Supervisory Board Personnel Committee after approval of the Bank’s results by the General Meeting of Shareholders.

Policy Evaluation

The Bank Millennium Group maintains a stable remuneration policy. Additionally in 2018 in the Bank’s retail network a programme was introduced in support of personnel stabilisation guaranteeing an appropriate level of fixed remuneration after meeting certain conditions.

The body supervising the activity of Bank Millennium, having reviewed the remuneration policy, has found that it is conducive to the development and security of the Bank Millennium SA Capital Group and the existing practice of managing variable components corresponds to the goals established in the Policy.