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functions like Credit and Risk. Bonus is to be prorated for employees who have worked for part of the year at the Bank.
(b) The Bank believes in the philosophy of collective ownership by its employees. Thus, Employee Stock Options of the Bank are distributed amongst employees basis their criticality and performance.
(c) Typically, all Stock option schemes at the Bank vest in a staggered manner. Besides the statutory requirement of grant and 1 year vesting, the total set of options vest in various tranches for up to a period of 5 years.
(d) Malus / claw back: In the event of negative contributions of the individual towards the achievements of the Banks objectives in any year, the deferred compensation is subjected to Malus / Claw back arrangements. Similar provisions apply in case the individual is found guilty of any major non- compliance or misconduct issues.
Description of the different forms of variable remuneration that the bank utilizes and the rationale for using the same
Variable Compensation at the Bank has the following distinct forms:
1. Statutory Bonus
2. Performance Pay :
a. Performance bonus
b. Monthly Variable Pay
3. Rewards & Recognition
The policy has been laid out keeping the following perspectives into considerations:
• The Variable pay structure and amounts shall always conform to applicable Income Tax laws, Labour laws, Regulatory requirements, any other applicable statutes and prevalent market practice.
• It is designed to promote meritocracy in the organization i.e. other things being equal, performers in a given role are expected to earn more than his/her peer group.
statutory bonus: Statutory Bonus in India is paid as per Payment of Bonus Act, 1965.
Performance bonus: All employees who are not a part of any Monthly Variable Pay but part of the year end performance review will be covered under the Performance Bonus Plan of the Bank. However, the actual pay-out of performance bonus shall be paid only to employees who have met its performance criteria.
Monthly variable Pay: Employees in the Sales function, directly responsible for revenue generation are covered under the Monthly Variable Pay if meeting the criteria of the respective scheme. Typically, some of the entry level roles and up to two levels of supervision thereof shall be covered.
rewards & recognition: The Bank has designed schemes and practices from time to time to celebrate employee / departmental / organizational successes. These celebrations may include offering tokens of appreciation to employees as defined in specific schemes. Fairness of application and transparency of communication shall be the hallmark of all such schemes. These will be subject to income tax laws, as applicable. Examples of such schemes may include: Long Service Awards (currently at one, three, five, seven and ten yrs. of completion of service with the Bank), Portfolio Improvement Reward Scheme; Functional R&R Schemes; Organizational Rewards Schemes such as: Service Champion; Process Excellence; Customer Connect Awards; Above and Beyond; Recognition program for Liabilities Branches for Retail Deposits; Recognition program for Asset growth in Branches
STATUTORY REPORTS
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