1- Objective and Scope of the Remuneration Policy
The main objective of this policy is planning, conducting, performing in a sustainable way, based on efficient risk management and preventive to extreme risk-taking, compliant with the scope of Bank’s operations, strategies, mission and vision and long term targets.
Remuneration Policy is revised to motivate, reward, protect and recruit the human sources required to contribute to the robust and efficient risk management for the sustainability of the Bank’s success in a transparent, fair and explicit manner.
Remuneration Policy is applied for all employees of the Bank including the executive members in terms of remuneration management.
The profile of the Bank’s employees is divided into two parts as follows: The employees who are the members of the Bank and Insurance Employees Union (BASS) and the employees who are not.
Employees who are the members of the Union, who work under the titles defined by the contract and subject to the provisions of the Collective Bargaining Agreement.
Non-member employees, who are not subject to the provisions of the Collective Bargaining Agreement.
Special employee is defined as the one who performs an important function in the risk profile of the Bank within the scope of Guide on Best Remuneration Practices at the Banks, published by the Banking Regulation and Supervision Agency.
2- Basic Principles and Guidelines of Remuneration
The main principle for the payment of all employees and executives in each level is to comply with the Bank’s ethical principles, internal balance and strategic targets and not to be associated with only short term performance of the Bank.
Equal pay for equal work: The wages of the employees are managed by the wage ranges determined for every level. In order to provide a unity in terms of payments, it is aimed that employees performing similar duties will get a similar payment. In this respect, duty positions have been determined depending on their authorities and responsibilities. Wages of the employees are determined depending on their responsibility and
performance. The remuneration policy of the Bank is reviewed once in a year and updated within the scope of Career and Salary Management System Guideline.
Wage and Fringe Benefits: The Bank's internal effective remuneration policy and budget facilities are determined by taking into consideration the Bank's compliance with the internal and external regulations, together with the job description and responsibility level of the employees, and the individual performance and competencies of the employees.
Remuneration Policy: Maintaining the internal wage balance is essential as well as sectoral data is analyzed in order to monitor sectoral development, gain necessary talented employees to the Bank and control / reduce employee turnover. While designing the employees’ wage and bonus payment model, the Bank’s position in the sector is analyzed according to the results of the Banking Sector wage survey conducted by independent institutions and accordingly, the Remuneration Committee is informed.
- Fixed Pay: It refers to the financial or non-financial payments reflecting the required responsibility taken by job definition together with proffessional experience regardless of any performance criteria.
- Variable Pay: It refers to the additional financial or non-financial payments based on performance.
- Wage Increases: Wage increases materialize twice in a year in the month of May and November based on the Collective Bargaining Aggrement between VakıfBank and Bank and Insurance Employees Union (BASS) for employees who are the members of the Union. It is determined by the decision of Board of Directors for the employees who are not subject to the provisions of the Collective Bargaining Agreement.
Bonus Payments Based on Performance: Bonus payments, amount of which is not guaranteed in advance, are paid for the purpose of assessing an employee’s current performance, ensuring the development of individual performance, encouraging employees for their performance in the future period and supporting corporate development of the Bank. Performance criteria is announced to employees and the criteria are reviewed regularly.
Payments of the special employee are carried out within the scope of “Guide on Best Remuneration Practices at the Banks” published by the BRSA. Non-cash variable pay for special employees is determined as equity shares particularly issued by the Bank, equity shares backed financial instruments or similar non-cash assets.
Exclusivity and confidentiality of the wages and other financial payments at the Bank are essential.
3- Duties and Responsibilities
The Board of Directors is authorized and responsible for ensuring that the Bank's remuneration practices are effectively conducted and managed within the framework of the relevant legislation and Remuneration Policy. The Board of Directors ensures the effectiveness of the Remuneration Policy by reviewing it at least once a yea
In this respect, the Remuneration Committee, established within the Board of Directors, monitors and supervises the remuneration practices of the Bank on behalf of the Board of Directors within the framework of this policy. The Remuneration Committee submits its evaluations and recommendations to the Board of Directors.
The remuneration committee is composed of at least two non-executive Board members carry out the follow-up the remuneration policies, processes and practices on behalf of the Board of Directors in order to ensure an independent and effective remuneration system in the Bank. Board of the Directors Affairs department performs secretarial procedures of the committee.
The remuneration committee is authorized to determine the fixed pay and variable pay of special employees in accordance with “Guide on the Best Remuneration Practices at the Banks” published by the BRSA.
Responsibilities of the remuneration committee are as follows;
- Preparation of the decisions submitted to the approval of the Board of Directors regarding remuneration, particularly special employees,
- Monitoring of the compliance and effectiveness of remuneration policies with the Bank's risk appetite and targets regularly,
- Giving opinion and support to the Board of Directors regarding the establishment and practice of the remuneration system,
- Monitoring the remuneration of the senior management within the scope of internal systems.
Special employees include members of the Board of Directors, senior management and other Bank employees who are determined to perform a function that has a significant impact on the Bank's risk profile.
Within the scope of Career and Salary Management System Guideline, the Corporate Development and Academy Department is responsible to the Board of Directors for the effective execution and management of the Bank's remuneration practices in accordance with the relevant legislation and this policy.
In this respect, the duties and activities related to the preparation, publication, updating, effective implementation and follow-up of the regulations regarding the Bank's remuneration procedures and principles are carried out, managed and coordinated by the Corporate Development and Academy Department. Other departments and branches of the Bank conduct their duties in this respect in coordination with the Corporate Development and Academy Department.
The compliance and effectiveness of the Bank's remuneration practices and activities with the relevant legislation and this Policy are subject to regular audits and evaluations within the scope of internal audit.
The policy was accepted with the decision of Head Office dated 30.12.2019 and numbered 65 and shall enter into force on the date of publication.
The Policy is conducted by the Corporate Development and Academy Department.