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.