PD-1.3.8B

In addition to the remuneration related disclosure included under Paragraph PD-1.3.8, the following qualitative and quantitative information pertaining to remuneration practices and policies covering the following areas must be disclosed in the annual report:

(a) The name, composition and mandate of the main body overseeing remuneration;

(b) Whether external consultants advice has been sought and by whom in the bank and in what areas of the remuneration process the consultants have been involved;

(c) The independence of remuneration for staff in risk management, internal audit, operations, financial controls, AML, internal shari a review/audit and compliance functions;

(d) The risk adjustment methodologies;

(e) The link between remuneration and performance;

(f) The long-term performance measures (deferral, malus, clawback);

(g) The types of remuneration (cash/equity, fixed/variable);

(h) Whether the remuneration committee reviewed the bank s remuneration policy during the past year, and if so, an overview of any changes that were made;

(i) A discussion of how the bank ensures that approved persons engaged in risk management, internal audit, operations, financial controls, AML, internal shari a review/audit and compliance functions are remunerated independently of the business units they oversee;

(j) Description of the ways in which the current and future risks are taken into account in the remuneration processes. Disclosures must include:

(i) An overview of the key risks that the bank takes into account when implementing remuneration measures;

(ii) An overview of the nature and type of the key measures used to take account of these risks, including risks difficult to measure;

(iii) A discussion on the ways in which these measures affect remuneration; and

(iv) A discussion of how the nature and type of these measures have changed over the past year and reasons for the change, as well as the impact of changes on remuneration;

(k) Description of the ways in which the bank seeks to link performance during a performance measurement period with levels of remuneration. Disclosures must include:

(i) An overview of main performance metrics for bank, top-level business lines and individuals;

(ii) A discussion of how amounts of individual remuneration are linked to bank-wide and individual performance; and

(iii) A discussion of the measures the bank will in general implement to adjust remuneration in the event that performance metrics are weak¹;

(l) Description of the ways in which the bank seeks to adjust remuneration to take account of longer term performance. Disclosures must include:

(i) A discussion of the bank s policy on deferral and vesting of variable remuneration and, if the fraction of variable remuneration that is deferred differs across employees or groups of employees, a description of the factors that determine the fraction and their relative importance; and

(ii) A discussion of the bank s policy and criteria for adjusting deferred remuneration before vesting and after vesting through clawback arrangements;

(m) Description of the different forms of variable remuneration that the bank utilises and the rationale for using these different forms. Disclosures must include:

(i) An overview of the forms of variable remuneration offered (i.e. cash, shares and share-linked instruments and other forms²); and

(ii) A discussion of the use of the different forms of variable remuneration and, if the mix of different forms of variable remuneration differs across employees or group of employees, a description of the factors that determine the mix and their relative importance;

(n) Number of meetings held by the main body overseeing remuneration during the financial year and aggregate remuneration paid to its members;

(o) Number and total amount of remuneration for approved persons and material risk takers for the financial year split into fixed and variable remuneration;

(p) Number and total amount of variable remuneration awarded during the financial year, split into cash, shares and share-linked instruments and other;

(q) Number and total amount of guaranteed bonuses awarded during the financial year;

(r) Number and total amount of sign-on awards made during the financial year;

(s) Number and total amount of severance payments made during the financial year, and highest such award to a single person;

(t) Total amount of outstanding deferred remuneration, split into cash, shares and share-linked instruments and other forms; and

(u) Total amount of deferred remuneration awarded during the financial year, paid out and reduced through performance adjustments.

¹ This should include the bank s criteria for determining weak performance metrics.

² A description of the elements corresponding to other forms of variable remuneration must be provided.

Amended: July 2015
Amended: April 2015
Amended: July 2014
Added: January 2014

Location:

PD-1.3.8B