Remuneration —

Well-balanced remuneration policy

Remuneration plays a vital role in personnel recruitment and retention. Under this remuneration policy the right performance incentives are set for individual employees and for management, thereby helping VP Bank to achieve its strategic objectives. Remuneration-based conflicts of interest between the involved functions and/or individuals are avoided.

The Nomination & Compensation Committee submits proposals regarding the underlying remuneration policy principles and remuneration levels to the Board of Directors and the General Executive Management. The Board of Directors approves the proposed principles and sets the remuneration levels for itself and the members of the General Executive Management in line with VP Bank regulations.

Compensation plays a central role in the recruitment and retention of employees. VP Bank subscribes to fair, performance-oriented and balanced practices in terms of compensation which are in keeping with the long-term interests of shareholders, employees and clients alike. The principles applied are laid down in the compensation policy:

• The compensation policy and practices of VP Bank Group are simple, transparent and sustainability-oriented – especially with regard to environmental, social social and executive management aspects. They are in line with the Group’s business strategy, objectives and values, as well as its long-term overall success, and take its equity situation into account.
• Performance orientation and performance differentiation are substantive components of the compensation policy and ensure the interlinking of variable compensation with the achievement of the strategic goals of the business.
• The compensation policy is compatible with and helps foster robust and effective risk management. It makes sure that compensation-based conflicts of interests of the functions or persons involved are avoided. The assumption of excessive risks by employees to increase compensation in the short term should be prevented where possible by setting appropriate incentives.
• The compensation policy renders possible fair and attractive compensation in line with the market to enable VP Bank Group to attract, motivate and retain qualified and talented employees. Conformity with market conditions is reviewed regularly.
• The compensation system is not founded on a purely formula-based approach and therefore possesses sufficient flexibility to take account of the business performance of VP Bank Group or its subsidiary companies.
• Compensation practices follow the principle of equal treatment. The level of fixed compensation depends on the function. The level of variable compensation reflects Group performance, the performance of the segment or team and/or individual performance.
• The compensation policy is subject to regular review. Relevant legal provisions are applied and implemented in compensation practices. Prescriptions specific to functions, in particular those relating to identified employees (risk takers), are taken into account.