COMPENSATION COMMITTEE
TERMS OF REFERENCE
1. Mission
The Compensation Committee, herein after referred to as the Committee, is responsible for recommending to the Board of Directors, herein after referred to as the Board, the form and amount of director and executive management compensation, approving the compensation policy and special compensation plans, including annual bonus schemes, share option plans and staff savings schemes across the Bank.
In the context of this document, Executive Management is defined to include, the General Manager Chief Executive Officer (GM CEO), Deputy General Managers, Assistant General Managers (or equivalent), General Manager of subsidiaries and any other position reporting to the GM CEO or the Board.
2. Membership
2.1 Members of the Committee shall be appointed and removed by the Board. The Committee shall elect at the time that the Committee is established or every year after the Annual General Assembly a Chairman and a Deputy who shall chair the meeting in the absence of the Chairman.
2.2 The Committee shall consist of not less than three members.
2.3 Only members of the Committee have the right to attend Committee meetings. However, other individuals such as the General Manager Chief Executive Officer, the Head of Human Resources and external advisers may be invited to attend for all or part of any meeting as and when appropriate.
3. Secretary
3.1 The Board Secretary shall act as the Secretary of the Committee.
4. Quorum
4.1 The quorum necessary for the transaction of business shall be two including the Chairman or the Deputy Chairman. A duly convened meeting of the Committee at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the Committee.
4.2 Any transaction of business of the Committee to be conducted by circulation shall require unanimous approval, allowing three business days for response.
4.3 In case of an equality of votes the Chairman of the Committee meeting shall have a casting vote
5. Meetings
5.1 The Committee shall meet at least twice a year and at such other times as the Chairman of the Committee shall require.
6. Notice of Meetings
6.1 Meetings of the Committee shall be summoned by the Secretary of the Committee at the request of any of its members.
6.2 Unless otherwise agreed, notice of each meeting confirming the venue, time and date together with an agenda of items to be discussed, shall be forwarded to each member of the Committee, any other person required to attend and all other non-executive directors, no later than five working days before the date of the meeting. Supporting papers shall be sent to Committee members and to other attendees as appropriate, at the same time.
7. Minutes of Meetings
7.1 The Secretary shall minute the proceedings and resolutions of all Committee meetings, including the names of those present and in attendance.
7.2 Minutes of Committee meetings shall be circulated promptly to all members of the Committee and, once agreed, to all members of the Board.
8. Annual General Meeting
8.1 The Chairman of the Committee shall attend the Annual General Meeting prepared to respond to any shareholder questions on the Committee’s activities.
9. Duties
The Committee shall:
9.1 Determine and agree with the Board the framework or broad policy for the compensation of the directors and executive management and make recommendations on policies relating to the recruitment, retention and termination for executive management.
9.2 Have responsibility for recommending to the Board the form and amount of the compensation for all directors.
9.3 Determine the policy for the disclosure of directors and executive management’s compensation.
9.4 Ensure that contractual terms on termination, and any payments made, are fair to the individual and the Bank, that failure is not rewarded and that the duty to mitigate loss is fully recognized.
9.5 Review and recommend to the Board employee compensation budget, benefits, equity programme and any changes in employee benefit structure throughout the Bank.
9.6 Be exclusively responsible for establishing the selection criteria, selecting, appointing and setting the terms of reference for any remuneration consultants who advise the committee.
9.7 Make available the Committee’s terms of reference. These should set out the Committee’s delegated responsibilities and be reviewed and, where necessary, updated annually.
9.8 Perform any other duties or responsibilities expressly delegated to the Committee by the Board from time to time.
10. Reporting Responsibilities
10.1 The Committee Chairman shall report formally to the Board on its proceedings after each meeting on all matters within its duties and responsibilities.
10.2 The Committee shall make whatever recommendations to the Board it deems appropriate on any area within its remit where action or improvement is needed.
10.3 The Committee shall produce an annual report of the Bank’s compensation policy and practices, which will form part of the Bank’s Annual Report and ensure each year that it is put to shareholders. The Annual Report will also state the frequency of, and attendance by members at, compensation committee meetings.
11. Other
11.1 The Committee shall, at least once a year, review its own performance, constitution and terms of reference to ensure it is operating at maximum effectiveness and recommend any changes it considers necessary to the Board for approval.
11.2 The terms of reference of the Committee shall be available on request and placed on the Bank’s website.
12. Authority
12.1 The Committee is authorized by the Board to seek any information it requires from any employee of the Bank in order to perform its duties.
12.2 The Committee, in connection with its duties, is authorized by the Board to obtain advice and assistance, as needed, from internal or external legal counsel, accounting firms, search firms, compensation specialists or other advisors, at the Bank’s expense.