Page 65 - CCB_Annual Report_2022

64 Corporate Governance Statement 65

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