Page 63 - CCB_Full-Annual-Report-2021

62 Corporate Governance Statement 63

Contents
Contents

∞ ensuring that a Conflict of Interest Policy Detail according to set personal objectives and
behavioural expectations. Performance
Policy is in place and is always is assessed through the Bank’s
adhered to; Strategic Report
Remuneration Components performance management process
(ROMP) and is reviewed when making
∞ subjecting the implementation of the Remuneration consists of two elements: individual rewards.
remuneration policy to central and fixed and variable payments.
independent internal review from the Performance-related remuneration is
Compliance function at least annually; a) Fixed Remuneration:
paid as cash via payroll and subject to
tax and National Insurance deductions.
∞ maintaining the view that all The fixed element of remuneration is The Bank does not operate shares or
flexible remuneration schemes are determined by the job performed, its level share based instruments. The Senior
discretionary and subject to the of complexity and responsibility, the level of Leadership Plan contains a four-year
approval of the Performance & expertise and experiences required, and the deferred payment clause.
Remuneration Committee; remuneration paid in the market for that Corporate Governance Statement
type of job. It is assessed on appointment ii Long Term Incentive Plan (LTiP)
∞ having an independent Risk & and is reviewed annually. Ad hoc reviews of Until 2020, the Bank awarded LTiPs to
Compliance function which has a direct salary may occur if there is a major change member of the Senior Management
reporting line into the Risk Committee; ∞ requiring its employees to undertake in responsibilities or benchmarking shows team. The last LTiP was granted in 2019
not to use personal hedging strategies salary is significantly lower than market and covers the performance period
∞ ensuring that total variable or remuneration or liability-related rate. In all cases, any ad hoc review must be 2019 to 2021.
remuneration does not limit the contracts of insurance to undermine the supported with a business case.
Bank’s ability to strengthen its capital risk alignment effects embedded in the iii Additional Bonus Schemes
base by ensuring that all variable and remuneration arrangements; Non-Executive Directors are office holders As part of the Bank’s attract and retain
non-variable pay are linked to specific who receive a fixed fee for their services, strategy, Performance & Remuneration
financial targets and are subject to ∞ setting appropriate ratios between which is made up of a basic fee and an Committee occasionally grant one-off
the approval of the Performance & fixed and variable components of total additional amount for chairing committees. bonus awards. These are always linked
Remuneration Committee who can remuneration so that the fixed element They are not entitled to any elements of to achievement of business plans and Independent Auditor’s Report
declare that all variable and non- represents the highest proportion of the variable pay, or other employee benefits are discretionary based on achievement
variable pay will not be paid in the total remuneration package; such as pension provision. Their fees are of pre-agreed objectives and criteria.
event of a potential capital shortfall; reviewed regularly in line with market
∞ confirming that payments related to the benchmarking. Governance
∞ regularly reviewing the regulatory early termination of a contract reflect
capital levels at the Bank’s Risk performance achieved over time and b) Variable Remuneration The Board of Directors has established
Committee which includes the are designed in a way that does not a Performance & Remuneration
Non-Executive Directors who sit on reward failure; The Bank has a maximum fixed to variable Committee, which:
the Performance & Remuneration remuneration ratio of 1:1, in line with
Committee. The Performance & ∞ the Bank will use the regulators’ CRD V. ∞ exercises independent judgment on
Remuneration Committee members remuneration principles in assessing remuneration policies, practices and
are therefore always aware of potential its exposure to risks arising from its There are three schemes that make up recommendations of the Executive; Financial Statements
capital issues; remuneration policy as part of the variable remuneration:
Internal Capital Adequacy Assessment ∞ ensures compliance with this policy,
∞ ensuring that the allocation of variable Process (ICAAP); i Annual Profit Share & Performance regulations and statutory duties;
remuneration components within the Bonus schemes: The profit share/
Bank also considers all types of current ∞ applying the same overall principles to performance bonus structure is for all ∞ advises on remuneration policies and
and future risks, and assessments of all directors and employees, regardless employees up to and including Executive practices generally;
financial performance used to calculate of whether they meet the definition of Directors and comprises of three
variable remuneration components “Material Risk Takers” and/or “Code Staff”. schemes: ∞ provides specific recommendations on
or pools of variable remuneration remuneration packages and other terms
components are based principally ∞ “Signing Bonus” “buy-out” and/or ∞ Profit Share; of employment for executive directors;
on profits; “golden handshake” are not routinely ∞ Sales’ Bonus;
used and are always subject to Chief ∞ Senior Leadership Plan. ∞ considers the implications of Notes to the Financial Statements
∞ ensuring its pension provision is in line Executive Officer and Board approval. remuneration policy and practices on
with its regulatory obligations under All variable remuneration is subject to The purpose of these schemes is to management risk, capital and liquidity.
auto-enrolment as well as its business malus and clawback for a period of motivate and reward high performers
strategy and values; seven years from the date of award. who significantly contribute to
sustainable results and perform