Page 64 - CCB_Annual Report_2022

64 Corporate Governance Statement
Remuneration Components
Remuneration consists of two elements:
fixed and variable payments.
a. Fixed Remuneration:
The fixed element of remuneration
at the Bank is determined by the job
performed, its level of complexity and
responsibility, the level of expertise
and experiences required, and the
remuneration paid in the market for
that type of job. It is assessed on
appointment and is reviewed annually.
Ad hoc reviews of salary may occur if
there is a major change in responsibilities
or benchmarking shows salary is
significantly lower than market rate. In
all cases, any ad hoc review must be
supported with a business case.
Non-Executive Directors are office
holders who receive a fixed fee for
their services, which is made up of a
basic fee and an additional amount
for chairing committees. They are not
entitled to any elements of variable
pay, or other employee benefits
such as pension provision. Their fees
are reviewed regularly in line with
market benchmarking.
b. Variable Remuneration
The Bank has a maximum fixed to
variable remuneration ratio of 1:1, in line
with CRD V.
There are three schemes that make up
variable remuneration:
i Annual Profit Share & Performance
Bonus schemes:
The profit share/performance bonus
structure is for all employees up to
and including Executive Directors and
comprises of three schemes:
• Profit Share;
• Sales’ Bonus;
• Senior Leadership Plan.
The purpose of these schemes is to
motivate and reward high performers
who significantly contribute to
sustainable results and perform
according to set personal objectives
and behavioural expectations.
Performance is assessed through the
bank’s Performance Management
process (ROMP) and is reviewed when
making individual rewards.
Performance-related remuneration
is paid as cash via payroll and subject
to tax and National Insurance
deductions; the Bank does not
operate shares or share based
instruments. The Senior Leadership
Plan contains a four-year deferred
payment clause.
ii Additional Bonus Schemes
As part of the Bank’s attract and
retain strategy, Performance
& Remuneration Committee
occasionally grant one-off bonus
schemes. These are always linked to
achievement of business plans and are
discretionary based on achievement
of pre-agreed objectives and criteria.
Governance
The Board of Directors has established
a Performance & Remuneration
Committee, which:
• exercises independent judgment on
remuneration policies, practices and
recommendations of the Executive;
65
• ensures compliance with this policy, has one business unit). When assessing
regulations and statutory duties; performance, both financial and non-
financial measures are considered, and to
• advises on remuneration policies and this end, clear behavioural criteria as well
practices generally;
as qualitative and quantitative measures
• provides specific recommendations on are detailed in the specific variable
remuneration packages and other terms pay schemes.
of employment for executive directors;
Individual performance is assessed through
• considers the implications of the Bank’s performance review process
remuneration policy and practices on (ROMP) and is considered when making
management risk, capital and liquidity. individual fixed or variable pay awards.
The Performance & Remuneration These assessments can negatively or
Committee is made up of non-executive positively affect any award given.
directors and shareholder representatives. Poor risk, compliance or conduct
The Chief Executive Officer, Chief People behaviours will affect the level of variable
Officer and General Counsel are attendees. pay given to individuals; the CRO provides
The full description of its composition, a report to Performance & Remuneration
tasks and authority are available in the Committee (the Committee) in Q1 each year
Terms of Reference for the committee. detailing any specific concerns he/she has
The Bank’s Performance & Remuneration at individual, team and company level. The
Committee meets a minimum of three CRO report also outlines current and future
times a year. risks, an assessment of the capital base of
It is inbuilt to the remuneration review the firm and the impact these have on the
process that the Bank’s Risk and determining and payment of variable pay.
Compliance function is able to provide The CRO will recommend to Committee
challenge to bonus and incentive payments whether any adjustment at either individual
where it feels individuals may be rewarded or firm level is warranted in their opinion.
for poor risk behaviours; this is achieved The Committee is also presented with a
through the Chief Risk Officer’s (CRO) financial performance report from the CFO
report to the Performance & Remuneration to assist their deliberations on variable
Committee, inclusion of the CRO in pay awards, which details anticipated
calibration and approval meetings, and the financial outturn, including Prudent
membership of the Chair of Risk on the Valuation Adjustment.
Performance & Remuneration Committee. The Committee reviews multi-year
performance when considering
Control Function Remuneration
remuneration decisions, enabling it to
In line with SYSC 19D 3.18, the consider longer term performance and
remuneration of senior officers in the Risk post event risks. This is intended to ensure
and Compliance function is proposed by that individuals are held to account for
the Chief Executive Officer in liaison with the longer term impact of their decisions
Human Resources and is decided upon by and actions and are not inappropriately
Performance & Remuneration Committee. rewarded for short term success. The
Committee will apply adjustments to
Remuneration for senior officers within both previous and current remuneration
Human Resources is decided upon by the decisions to reflect multi-year performance
CEO with approval from Performance &
Remuneration Committee. (see malus and clawback below).
Performance assessment Pensions
The Bank does not operate an occupational
All remuneration decisions are subject to pension scheme. The company does
assessment of performance at individual,
business unit and company level (in line however contribute to employee’s personal
with the PRA rulebook 15.4. it should pension schemes via a Group Personal
Pension Plan with Royal London.
be noted that currently, the Bank only