Share based payments
In 2012, the Group implemented a policy specifying the principles of remuneration for persons having a material impact on the risk profile of Bank Millennium Group, as amended, in accordance with the requirements described in Resolution of the Polish Financial Supervision Authority No. 258/2011, and then the Regulation of the Minister of Development and Finance of March 6, 2017 on the risk management system and the internal control system, remuneration policy and the detailed method of internal capital estimation in banks. In accordance with the policy, employees of the Group having a significant impact on the Group’s risk profile receive variable remuneration, part of which is paid in the form of financial instruments: the Bank’s phantom shares in 2018; Bank Millennium own shares: for 2019-2021. Commencing from 2019, by the decision of the General Meeting of Bank’s Shareholders of August 27, 2019, the Group introduced an incentive program to remuneration entitled persons previously identified as having a significant impact on the risk profile (Risk Taker). Under this framework, the Own Shares acquired by the Company will be, in accordance with the applicable Risk Taker’s remuneration policy, intended for free acquisition in the appropriate number by the indicated Risk Takers during the Program Term.
| Variable remuneration – financial instruments for: | 2021 | 2020 | 2019 | 2018 |
|---|---|---|---|---|
| Kind of transactions in the light of IFRS 2 | Share-based payment transactions | Cash-settled share-based payments | ||
| Commencement of vesting period | 1 January 2021 | 1 January 2020 | 1 January 2019 | 1 January 2018 |
| The date of announcing the program | 27 August 2019 | 30 July 2012 | ||
| Starting date of the program in accordance with the definition of IFRS 2 | Date of the Personnel Committee meeting taking place after closing of financial year | |||
| Number of granted instruments | Determined at the grant date of the program in accordance with the definition of IFRS 2 | |||
| Maturity date | 3 years since the date of granting program | |||
| Vesting date | 31 December 2021 | 31 December 2020 | 31 December 2019 | 31 December 2018 |
| Vesting conditions | Employment in the Group 2021, results of the Group and individual performance | Employment in the Group 2020, results of the Group and individual performance | Employment in the Group 2019, results of the Group and individual performance | Employment in the Group 2018, results of the Group and individual performance |
| Program settlement | Programs 2018: on the settlement date, the participant will be paid the amount of cash being equal to the amount of held by a participant phantom shares multiplied by arithmetic mean of the Bank’s share price at the closing of last 10 trading sessions on the Stock Exchange in Warsaw, preceding the settlement date. Aforementioned value cannot be greater or less than 20% compared to the original value of the deferred share pool. Phantom shares are settled in three equal annual instalments starting from the date of the Personnel Committee which decides about assignment.
Programs 2019 – 2021: on the program settlement date, the participant will receive the allocated treasury shares. |
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| Program valuation | The fair value of the program is determined at each balance sheet date according to the rules adopted for determining the value of the program on the settlement date. | |||
| Financial instruments granted to Group’s employees who are not members of the Management Board of the Bank, for the year: | 2021 | 2020 | 2020* | 2019 | 2019* | 2018 |
|---|---|---|---|---|---|---|
| – | Own shares | Phantom shares | Own shares | Phantom shares | Phantom shares | |
| Date of shares assigning | – | 03.07.2020 | 21.02.2020 | 23.01.2019 | ||
| Number of shares | – | 0 | 0 | 406 779 | 5 271 | 46 071 |
| granted | – | 0 | 0 | 0 | 0 | 0 |
| deferred | – | 0 | 0 | 406 779 | 5 271 | 46 071 |
| Value as at assigning date (PLN) | – | 0 | 0 | 1 296 323 | 48 210 | 423 028 |
| granted | – | 0 | 0 | 0 | 0 | 0 |
| deferred | – | 0 | 0 | 1 296 323 | 48 210 | 423 028 |
| Fair value as at 31.12.2021 (PLN) | – | 0 | 0 | 3 333 554 | 48 210 | 338 422 |
At the balance sheet date, the Personnel Committee of the Management Board has not taken a decision on the amount of variable remuneration for Group’s employees who are not members of the Management Board of the Bank for 2021.
| Financial instruments granted to members of the Management Board of the Bank, for the year: |
2021 | 2020 | 2019 | 2018 |
|---|---|---|---|---|
| Own shares | Own shares | Own shares | Phantom shares | |
| Date of shares assigning | – | 03.07.2020 | 31.05.2019 | |
| Number of shares | – | 0 | 322 599 | 78 753 |
| granted | – | 0 | 0 | 0 |
| deferred | – | 0 | 322 599 | 78 753 |
| Value as at assigning date (PLN) | – | 0 | 1 028 052 | 717 444 |
| granted | – | 0 | 0 | 0 |
| deferred | – | 0 | 1 028 052 | 717 444 |
| Fair value as at 31.12.2021 (PLN) | – | 0 | 2 643 698 | 645 381 |
At the publication date of the Annual Report, the Personnel Committee of the Supervisory Board has not taken a decision on the amount of variable remuneration for the members of the Management Board for 2021.
Payments based on the former Euro Bank shares
Bank Millennium took over the liabilities of Euro Bank to employees who were identified as having a significant impact on the risk profile and received variable remuneration, part of which was paid in the form of shares of the former Euro Bank in the years preceding the merger. On the day Euro Bank was taken over by Bank Millennium, these shares ceased to exist. Therefore, Bank Millennium adopted by decision of the Supervisory Board the rules of converting nonexistent Euro Bank shares into Bank Millennium shares. In 2022: 237,848 shares of Bank Millennium, remain to be paid out.