Remuneration policy

The Bank Millennium Group functions the „Employee remuneration policy in the Bank Millennium SA Group”, which formulates the assumptions used to shape fixed and variable remuneration components for all employees of the Group.

According to the policy, in the Bank Millennium the main source of employees’ income is the base salary resulting from the employment contract. Variable remuneration is an additional, motivational element of total remuneration and shall not exceed 100% of base salary. The employee’s base salary is shaped in relation to the tasks performed in a given organizational unit, the scope of responsibility, qualifications, impact on the company’s risk profile and based on the analysis of payroll information presented in remuneration reports with regards to the financial market. 

The Bank regularly reviews salaries and positions. 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 to change the base salary of employees. Salary levels are verified taking into account periodic assessment of work results, skills and are compared with market remuneration benchmarks information. 

Variable remuneration is shaped within various bonus systems, which aim to motivate employees to implement business and organizational targets. Bonus systems and periodic assessment criteria in the Bank Millennium Group are adapted to the specific nature of employees’ activities in individual areas of the Group. The amount of bonus budgets is determined after analysis of capital and liquidity ratios and depending on realisation of Bank Millennium operational results. In case of business lines staff, the budgets are also linked to realization of targets of particular lines. It is assumed that individual bonuses may not exceed 100% of the total annual base salary. Individual bonuses are awarded within  the variable remuneration pool based on an assessment of the work and the degree of commitment to achieving the goals set for employees. 

The Bank Millennium Group pay attention to properly shape the remuneration of employees in managerial positions that are classified as Risk Takers. The principles of awarding variable remuneration for Members of the Management Board of Bank Millennium and other Risk Takers are included in the „Policy of remuneration of employees having a significant impact on the risk profile in the Bank Millennium SA Group”. The policy is reviewed annually. 

The bonus pool for Risk Takers is determined after prior analysis of the Bank’s situation in terms of: 

• business results achieved: 
• liquidity: loans/deposits ratio, value of liquid assets; 
• capital adequacy ratios in relation to the KNF reference level. 

The evaluation of the results includes financial and non-financial criteria and takes place over a period of at least three years. 

Rules for the payment of variable remuneration paid in 2021 for 2020: 

In financial year 2021, Bank Millennium SA, under implementation of the incentive programme the rules of which are provided for in the Resolution no. 4 of the Extraordinary General Meeting of Shareholders of 27 August 2019 in the matter of establishment of incentive programme and determination of principles governing management thereof, authorisation of the Company Management Board to purchase own shares for purpose of implementation of the incentive programme and establishment of reserve capital for purchase of such shares (as amended by Resolution of the Extraordinary General Meeting of Shareholders no. 2/2020 of 3 July 2020; (‘GM Resolution’), as well as in Remuneration Policy with respect to Risk Takers in Bank Millennium S.A. Group and the Incentive Programme Regulations, acquired the Bank’s own shares exclusively for the purpose of implementing an incentive programme for employees whose professional activities have a significant impact on the risk profile.

Aggregate data on share purchases in 2021 

All shares thus acquired, were transferred to employees free of charge during 2021. 

Determining the terms of contracts and remuneration for Members of the Management Board is the responsibility of the Supervisory Board, taking into account the recommendations of the Personnel Committee of the Supervisory Board responsible for supervising the remuneration policy. The remuneration framework for Management and Supervisory Board Members is defined in the „Remuneration policy with regard to members of the Management Board and Supervisory Board of Bank Millennium SA ” adopted by the Shareholders’ General Meeting. 

The Policy is one of instruments facilitating implementation of business strategy, long term interests and stability of the Bank and supports proper and effective management of risk
and mitigation of conflicts of interests in particular through: 

1. development of adequate level of remuneration components, in relation to the function performed and the scale of the Bank’s operations, including the principle of transparency
   of their creation, 
2. rendering parts of remuneration due to management Board Members conditional upon
   the financial and business performance of the Bank, 
3. adoption of the structure of variable and fixed components of remuneration of Management Board Members ensuring that motivation aimed towards receiving variable components
   of remuneration does not creative the incentive to undertake excessive risks,  
4. ensuring only a fixed component of remuneration for Members of the Supervisory Board, and its independence from the financial and business results of the Bank 
5. supporting responsible management attitudes relative to long term business objectives of the Bank by way, inter alia, of transparent assessment of performance by the Management Board Members. 

Decisions on granting bonuses to Management Board members are made after analysing the results, taking into account the financial criteria: 

• implementation of planned budgets and indicators set for the managed area of activity, 
• comparisons with other banks of a similar size, 
• business market criteria established for the period; 

and non-financial criteria, in particular: 

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

Members of the Supervisory Board receive only fixed remuneration for their work in the Supervisory Boards and Committees which is adequate to their function and the scale of operations of the Bank Millennium Group. 

The total value of base remuneration of Members of the Management Board for performing this function in 2021 was PLN 10 500 thousand. Additionally, Members of the Board were paid part of an annual bonus for 2017, 2018 and 2019 years (in the form of cash and phantom shares) as well as additional benefits. 

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

In 2021, no variable remuneration was awarded to the members of the Management Board with respect to 2020. 

The decision to award variable remuneration to Management Board Members for 2021 shall be taken by the Supervisory Board Personnel Committee after approval of the Bank’s results by the General Meeting of Shareholders.  

The Bank Millennium Group maintains a stable remuneration policy. 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.