18. Remuneration
| No: 44047144 | Date(g): 27/12/2022 | Date(h): 4/6/1444 | Status: In-Force |
| 18.1 | The disclosures described in this chapter provide information on a bank's remuneration policy, the fixed and variable remuneration awarded during the financial year, details of any special payments made, and information on a bank's total outstanding deferred and retained remuneration. | ||
| 18.2 | The disclosure requirements under this section are: | ||
| 18.2.1 | Table REMA - Remuneration policy | ||
| 18.2.2 | Template REM1 - Remuneration awarded during financial year | ||
| 18.2.3 | Template REM2 - Special payments | ||
| 18.2.4 | Template REM3 - Deferred remuneration | ||
| 18.3 | Table REMA provides information on a bank's remuneration policy as well as key features of the remuneration system. | ||
| 18.4 | Templates REM1, REM2 and REM3 provide information on a bank's fixed and variable remuneration awarded during the financial year, details of any special payments made, and information on a bank's total outstanding deferred and retained remuneration, respectively. | ||
| 18.5 | The disclosure requirements should be published annually. When it is not possible for the remuneration disclosures to be made at the same time as the publication of a bank's annual report, the disclosures should be made as soon as possible thereafter. | ||
| Table REMA: Remuneration policy |
| Purpose: Describe the bank's remuneration policy as well as key features of the remuneration system to allow meaningful assessments by users of Pillar 3 data of banks' compensation practices. |
| Scope of application: The table is mandatory for all banks. |
| Content: Qualitative information. |
| Frequency: Annual |
| Format: Flexible. |
| Banks must describe the main elements of their remuneration system and how they develop this system. In particular, the following elements, where relevant, should be described: |
| Qualitative disclosures | |||
| (a) | Information relating to the bodies that oversee remuneration. Disclosures should include: | ||
| • | Name, composition and mandate of the main body overseeing remuneration. | ||
| • | External consultants whose advice has been sought, the body by which they were commissioned, and in what areas of the remuneration process. | ||
| • | A description of the scope of the bank's remuneration policy (eg by regions, business lines), including the extent to which it is applicable to foreign subsidiaries and branches. | ||
| • | A description of the types of employees considered as material risk-takers and as senior managers. | ||
| (b) | Information relating to the design and structure of remuneration processes. Disclosures should include: | ||
| • | An overview of the key features and objectives of remuneration policy. | ||
| • | Whether the remuneration committee reviewed the firm's remuneration policy during the past year, and if so, an overview of any changes that were made, the reasons for those changes and their impact on remuneration. | ||
| • | A discussion of how the bank ensures that risk and compliance employees are remunerated independently of the businesses they oversee. | ||
| (c) | Description of the ways in which current and future risks are taken into account in the remuneration processes. Disclosures should include an overview of the key risks, their measurement and how these measures affect remuneration. | ||
| (d) | Description of the ways in which the bank seeks to link performance during a performance measurement period with levels of remuneration. Disclosures should include: | ||
| • | An overview of main performance metrics for bank, top-level business lines and individuals. | ||
| • | A discussion of how amounts of individual remuneration are linked to bank-wide and individual performance. | ||
| • | A discussion of the measures the bank will in general implement to adjust remuneration in the event that performance metrics are weak, including the bank's criteria for determining "weak" performance metrics. | ||
| (e) | Description of the ways in which the bank seeks to adjust remuneration to take account of longer-term performance. Disclosures should include: | ||
| • | 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. | ||
| • | A discussion of the bank's policy and criteria for adjusting deferred remuneration before vesting and after vesting through clawback arrangements, subject to the relevant laws in Saudi Arabia. | ||
| (f) | Description of the different forms of variable remuneration that the bank utilizes and the rationale for using these different forms. Disclosures should include: | ||
| • | An overview of the forms of variable remuneration offered (ie cash, shares and share-linked instruments and other forms). | ||
| • | 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 groups of employees), a description the factors that determine the mix and their relative importance. | ||
| Template REM1: Remuneration awarded during the financial year |
| Purpose: Provide quantitative information on remuneration for the financial year. |
| Scope of application: The template is mandatory for all banks. |
| Content: Quantitative information. |
| Frequency: Annual |
| Format: Flexible. |
| Accompanying narrative: Banks may supplement the template with a narrative commentary to explain any significant movements over the reporting period and the key drivers of such movements. |
| a | b | |||
| Remuneration amount | Senior management, as defined in SAMA circular No.42081293 date 21/11/1442H | Other material risktakers | ||
| 1 | Fixed remuneration | Number of employees | ||
| 2 | Total fixed remuneration (rows 3 + 5 + 7) | |||
| 3 | Of which: cash-based | |||
| 4 | Of which: deferred | |||
| 5 | Of which: shares or other share-linked instruments | |||
| 6 | Of which: deferred | |||
| 7 | Of which: other forms | |||
| 8 | Of which: deferred | |||
| 9 | Variable remuneration | Number of employees | ||
| 10 | Total variable remuneration (rows 11 + 13 + 15) | |||
| 11 | Of which: cash-based | |||
| 12 | Of which: deferred | |||
| 13 | Of which: shares or other share-linked instruments | |||
| 14 | Of which: deferred | |||
| 15 | Of which: other forms | |||
| 16 | Of which: deferred | |||
| 17 | Total remuneration (rows 2 + 10) | |||
| Definitions and instructions |
| Senior management and other material risk-takers categories in columns (a) and (b) must correspond to the type of employees described in Table REMA. |
| Other forms of remuneration in rows 7 and 15 must be described in Table REMA and, if needed, in the accompanying narrative. |
| Template REM2: Special payments |
| Purpose: Provide quantitative information on special payments for the financial year. |
| Scope of application: The template is mandatory for all banks. |
| Content: Quantitative information. |
| Frequency: Annual. |
| Format: Flexible. |
| Accompanying narrative: Banks may supplement the template with a narrative commentary to explain any significant movements over the reporting period and the key drivers of such movements. |
| Special payments | Guaranteed bonuses | Sign-on awards | Severance payments | |||
| Number of employees | Total amount | Number of employees | Total amount | Number of employees | Total amount | |
| Senior management | ||||||
| Other material risk-takers | ||||||
Definitions and instructions Senior management and other material risk-takers categories in rows 1 and 2 must correspond to the type of employees described in Table REMA. Guaranteed bonuses are payments of guaranteed bonuses during the financial year. Sign-on awards are payments allocated to employees upon recruitment during the financial year. |
| Severance payments are payments allocated to employees dismissed during the financial year. |
| Template REM3: Deferred remuneration |
| Purpose: Provide quantitative information on deferred and retained remuneration. |
| Scope of application: The template is mandatory for all banks. |
| Content: Quantitative information. |
| Frequency: Annual. |
| Format: Flexible. |
| Accompanying narrative: Banks may supplement the template with a narrative commentary to explain any significant movements over the reporting period and the key drivers of such movements. |
| a | b | c | d | e | |
| Deferred and retained remuneration | Total amount of outstanding deferred remuneration | Of which: total amount of outstanding deferred and retained remuneration exposed to ex post explicit and/or implicit adjustment | Total amount of amendment during the year due to ex post explicit adjustments | Total amount of amendment during the year due to ex post implicit adjustments | Total amount of deferred remuneration paid out in the financial year |
| Senior management | |||||
| Cash | |||||
| Shares | |||||
| Cash-linked instruments | |||||
| Other | |||||
| Other material risk-takers | |||||
| Cash | |||||
| Shares | |||||
| Cash-linked instruments | |||||
| Other | |||||
| Total |
| Definitions |
| Outstanding exposed to ex post explicit adjustment: Part of the deferred and retained remuneration that is subject to direct adjustment clauses (for instance, subject to malus, clawbacks or similar reversal or downward revaluations of awards). |
| Outstanding exposed to ex post implicit adjustment: Part of the deferred and retained remuneration that is subject to adjustment clauses that could change the remuneration, due to the fact that they are linked to the performance of other indicators (for instance, fluctuation in the value of shares performance or performance units). |
| In columns (a) and (b), the amounts at reporting date (cumulated over the last years) are expected. In columns (c)-(e), movements during the financial year are expected. While columns (c) and (d) show the movements specifically related to column (b), column (e) shows payments that have affected column (a). |