Compensation policies

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 S.A.

[GRI 102-30] 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.

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.

In pursuit of the Compensation Policy, the Bank Millennium Group has in place the “Regulations for awarding variable compensation elements” setting out the rules for awarding bonuses on a comprehensive basis for all of the Bank’s units. The main source of income for employees is their base salary resulting from their employment contract. Variable compensation is an additional motivational part of the overall compensation. [GRI 102-25] 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 102-11, GRI 102-30] 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.

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.

Bonus for risk takers in the Bank Millennium Group who are not members of the Bank Millennium S.A. Management Board – according to the policy 50% is paid in cash and the remaining 50% is paid out in the form of a financial instrument. At least 40% of the awarded variable remuneration is deferred in equal installments for 3 years.

In 2019, in connection with the merger of Bank Millennium and Euro Bank, the process of harmonizing jobs and salaries of the former Euro Bank employees began. The purpose of the harmonization process is to have all employees of the Bank Millennium Group subject to uniform principles set forth in compensation policies, regulations and instructions.