The Remuneration Policy applicable at Alior Bank is the core document for the policy and rules of pay of the Bank’s staff. It includes the rules for the pay of individuals who, due to their special role in the Bank’s risk management system, have been covered by a separate regulatory regime in this regard, i.e.:
- Material Risk Takers (MRT), including the Management Board,
- Individuals exercising Control Functions,
- staff of the Regulatory Compliance Department and Audit Department,
- staff involved in the offering or distribution of banking, investment and insurance products and services.
Objectives of the Policy:
- promote correct and effective management of risks, and discourage from taking excessive risks (exceeding the risk levels acceptable to the Bank) in order to maintain a solid equity base and having regard to the long-term interests of the Bank – its shareholders and customers,
- promote the Bank’s strategy for sustainable development and prudent risk management policy,
- mitigate conflict of interest,
- maintain transparent relationship between individual results and individual pay by focusing on goals linked to responsibilities and actual influence,
- ensure that the Bank’s staff act in the best interests of their customers, including provide them with clear and transparent information on services and products offered by the Bank.
Particularly important for the achievement of the above-mentioned goals is how the Policy addresses MRTs.
The main Policy statements regarding MRT:
- pay composed of fixed and variable parts,
- avoidance of awarding to MRT pension benefits which are not defined in advance,
- committing MRTs to avoid using individual hedging strategies or insurance regarding remuneration and liability in order to alleviate the consequences of incorporation of risks in the pay system applicable to them,
- except for staff exercising control functions, the total amount of the variable pay is based on the assessment of the results of MRT and of their respective organisational unit as well as results of the Bank within the area of responsibility of that person, taking into account the results of the Bank as a whole,
- maximum ratio of variable pay of MRT to fixed pay: 100%,
- at least 50% of the variable pay of MRT shall be an incentive to detailed commitment to long-term interests of the Bank, and comprises financial instruments linked to the Bank’s shares. The remaining part of variable pay is paid out in cash as Cash Variable Pay,
- at least 40% of MRT variable pay, and if MRT variable pay is for a particularly high amount, at least 60% of the variable pay – shall be a deferred pay,
- The variable pay of the Management Board is adapted to the provisions of the Act of 9 June 2016 on the rules of remuneration of executives of certain companies.
Executive Options Programme
The Executive Options Programme for 2013-15 covering the then-members of the Management Board and key managers was adopted by resolution 28/2012 of the Extraordinary General Meeting of Alior Bank S.A. of 19 October 2012 on conditional increase in share capital of the Bank and the issuance of subscription warrants, and the rules & regulations for the incentive programme adopted by resolution of the Supervisory Board of Alior Bank S.A. of 27 March 2013.
Assumptions of the Programme: issuance of three tranches of subscription warrants (series A, B and C) and the corresponding tranches of new shares of the Bank (series D, E and F) with a combined nominal value not exceeding PLN 33,312,500. In December 2018, “A” Series warrants which authorised their holders to take up “D” Series shares expired and “B” Series warrants expired in December 2019.
The number of unrealised warrants as at 31 December 2019 is presented in table below:
| Warrant Series | Number of exercisable issued warrants | Total | |||
|---|---|---|---|---|---|
| Warrant Series | A | Number of exercisable issued warrants | 0 | Total | 0 |
| Warrant Series | B | Number of exercisable issued warrants | 0 | Total | 0 |
| Warrant Series | C | Number of exercisable issued warrants | 543 725 | Total | 543 725 |
In connection with the issuance of shares accompanied by rights issue, on 27 July 2016, the Supervisory Board adopted a technical adjustment of the Executive Option Programme aimed at ensuring economic neutrality of the programme for the eligible individuals, consisting in the calculation of the decrease of theoretical value of the Executive Option Programme and issuance to the individuals covered by this programme of an appropriate number of phantom shares with parameters similar to warrants.