BPCE - 2018 Registration document
3 REPORT ON CORPORATE GOVERNANCE
Rules and principles governing the determination of pay and benefits
PAY POLICY APPLICABLE TO THE MEMBERS OF THE MANAGEMENT BOARD ➡ The compensation policy described below applies to Management Board Members, except for the Chairman, whose policy is specified above, and except for the Chief Executive Officer of Natixis, a BPCE Management Board Member compensated solely for his corporate office at Natixis.
Principles and criteria adopted
Based on a motion by the Remuneration Committee, the Supervisory Board sets the pay granted to the members of the Management Board. Fixed pay primarily reflects the professional experience related to the position held and the responsibilities exercised, and is determined by comparison to market practices. For members of the Management Board, the variable portion is determined based on target pay equal to 80% of their fixed pay (including the special increase, if applicable) for the fiscal year, with a maximum of 100%. Variable pay is determined based on the quantitative and qualitative criteria previously validated by the Supervisory Board. It is awarded if the criterion for triggering variable pay is met, specifically pertaining to the Group Basel III Common Equity Tier 1 ratio. This level corresponds to the minimum CET1 level, plus the P2R, P2G and the phase-in combined buffers set by the ECB in its letter of December 19, 2017. No variable portion is paid if this criterion is not met (1) . Quantitative criteria account for 60% of variable pay and are defined based on quantitative factors that reflect how well a number of the Group’s financial fundamentals are being satisfied. These criteria are defined by the Supervisory Board, and take into account (2) : net income attributable to equity holders of the parent (30%), - the Group’s cost/income ratio (20%), - the Group’s net banking income (10%). - For each of these criteria, if the target as set by the Supervisory Board is reached, Management Board Members would be entitled to receive the entire fixed percentage. In respect of fiscal year 2018, qualitative criteria account for 40% of variable pay and are determined based on key targets in terms of: Retail Banking and Insurance; - Human Resources and BPCE SA group Corporate Secretary’s Office; - Finance and Strategy; - Supervision – control – governance; - Digital and Information System. - Only quantitative criteria can be used to determine outperformance. Between 50% and 70% of variable pay is deferred in equal installments over three years, depending on the variable pay amount. The deferred portion is indexed to the change in net income attributable to equity holders of the parent (3) , assessed as a rolling average over the last three calendar years preceding the allocation year and the payment year. Payment of the deferred portion is contingent upon attaining a standard Return on Equity (ROE) for core Group businesses that is at least equal to 4% during the fiscal year before payment falls due. With regard to the terms of payment for variable pay owed to Catherine Halberstadt and Laurent Roubin: in respect of fiscal year 2016: deferred for a fraction representing 50% over 2018, 2019, and 2020 (16.66% each year); - in respect of fiscal year 2017: deferred for a fraction representing 50% over 2019, 2020, and 2021 (16.66% each year); - in respect of fiscal year 2018: deferred for a fraction representing 50% over 2020, 2021, and 2022 (16.66% each year); - Payment of variable pay owed in respect of 2018 will be submitted for an ex-post vote of the Annual General Shareholders’ Meeting in 2019 called to approve the financial statements for fiscal year 2018.
Annual variable pay
Multi-year variable pay
Members of the Management Board do not receive any multi-year variable pay. Members of the Management Board do not receive any exceptional pay.
Grants of stock options/preference shares Members of the Management Board do not receive any stock options or preference shares. Grants of bonus shares
Except when related to the nature of the corporate office, members of the Management Board do not receive any bonus shares.
Attendance fees Sign-on bonus
Members of the Management Board do not collect attendance fees.
Members of the Management Board do not receive a sign-on bonus. The total CET1 ratio requirement set by the ECB, including the "Pillar 2 Guidance" component, is not subject to disclosure. (1) The Supervisory Board has established specific expected targets for these quantitative goals, but for confidentiality reasons, they are not publicly disclosed. (2) For fiscal years preceding 2016, deferred variable pay was indexed to net income attributable to equity holders of the parent after neutralizing the impact of the revaluation of own debt. (3)
Registration document 2018
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