PD-1.3.10B
Past version: Effective from 01 Jul 2014 to 31 Mar 2015
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In addition to the remuneration related disclosure included under Paragraph PD-1.3.10, 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, internal Shari'a review/audit, AML 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, internal Shari'a review/audit, AML 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 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 2014
Added: January 2014
Added: January 2014