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RESOLUTION OF BOARD OF THE NATIONAL BANK OF UKRAINE

of December 27, 2023 No. 189

About modification of the Regulations on policy of remuneration in bank

According to Articles 7, of 15, 56 Laws of Ukraine "About the National Bank of Ukraine", Articles 7, of 39, 67 Laws of Ukraine "About banks and banking activity", for the purpose of enhancement of regulatory legal acts of the National Bank of Ukraine the board of the National Bank of Ukraine DECIDES:

1. Make changes to Regulations on policy of the remuneration in bank approved by the resolution of Board of the National Bank of Ukraine of November 30, 2020 No. 153 (with changes) (further - the Provision), having been reworded as follows it which is applied.

2. To provide to banks of Ukraine:

1) reduction of the internal documents connected with realization of policy of remuneration in bank in compliance with requirements of the Provision taking into account the changes made by this resolution till April 30, 2024;

2) fulfillment of requirements of the Provision taking into account the changes made by this resolution in case of decision making according to the existing civil, employment contracts, contracts signed between bank and physical persons (further - agreements), accomplishment of conditions of current agreements, modification of current agreements, the conclusion of new agreements.

3. The resolution becomes effective from the date of, its official publication following behind day, except the subitem 2 Items 7, of the subitem 1 of Item 8 of the Section II of Provisions which become effective since January 1, 2025.

Approved by the Resolution of Board of the National Bank of Ukraine of November 30, 2020 No. 153

(in edition of the Resolution of Board of the National Bank of Ukraine of December 27, 2023 No. 189)

Regulations on policy of remuneration in bank

I. General provisions

1. This Provision is developed according to the laws of Ukraine "About the National Bank of Ukraine", "About banks and banking activity", "About joint-stock companies" and No. 575/2013 of June 26, 2013 about prudential requirements for credit institutes and about modification of Regulations (EU) No. 648/2012, of the Delegated Regulations of the Commission (EU) 2021/923 of the March 25, 2021 supplementing the Directive of the European Parliament and Council of 2013/36/EU rather normative technical standards establishing criteria for determination of responsibility of heads, control functions is based on provisions of the Directive of the European Parliament and Council 2013/36/EU of June 26, 2013 about access to activities of credit institutes and prudential supervision of credit institutes and investment firms, about modification of the directive 2002/87 / the EU and about cancellation of Directives 2006/48/EU and 2006/49/EU, Regulations of the European Parliament and Council (EU) structural divisions and considerable influence on profile of risk of essential structural division and for identification of employees or categories of personnel whose professional activity has influence on profile of risk of organization which is same considerable, as well as employees or the categories of personnel specified in Article 92 (3) this Directive, the Closing statement of the European banking supervisor authority on establishments of policy on ensuring proper compensation according to the Directive 2013/36/EU (on July EBA/GL/2021/04, 02 2021) and establishes requirements to remuneration policy, and also requirements to provisions and reports on remuneration of members of the supervisory board (further - council) and bank boards (further - board, together - governing bodies), other persons whose professional activity exerts considerable impact on profile of risk of bank, with whom civil, employment agreements are signed, contracts (further - workers/employees of bank, agreements respectively).

2. Terms in this Provision are used in the following values:

1) remuneration - material payment in cash and/or measure of non-cash stimulation of the member of council or board (further - the member of governing body), the man of weight for accomplishment of the job responsibilities assigned to he (she) which includes all fixed and/or variable components of remuneration provided by conditions of the governing body concluded between such member, such man of weight and bank of the agreement and/or the decision of general meeting of participants (shareholders) of bank (further - general meeting) / the supreme body of national bank - for members of council, the decision of council - for board members, the head and employees of division of internal audit, the chief risk manager, the chief komplayens-manager, the decision of board - for all other men of weight;

2) payments for dismissal - the compensation payments connected with early agreement cancelation with the member of governing body, the man of weight and possible restrictions concerning his (her) activities after the termination of his (her) powers (if such payments are provided by the agreement);

3) the supreme body of the state bank body exercising control of corporate laws of the state in national bank performs functions of the supreme body of management of national bank and within which competence decision making about establishment of amount of remuneration of members of the supervisory board of national bank, introduction of compensation and incentive payments is;

4) influential person person whose professional activity exerts considerable impact on profile of risk of bank, except the member of governing body;

5) variable remuneration component of remuneration of the member of governing body, the man of weight which is not the fixed remuneration according to this Provision;

6) committee on remunerations - committee of council on remuneration determination to officials of bank or committee on appointments and remunerations to officials of bank, or committee on remunerations;

7) non-cash tools are tools which can be used by bank for payment of variable remuneration and which treat:

bank shares;

the financial instruments connected with own tools of the capital of bank;

the tool with write-off/conversion conditions, subordinated debt;

8) person whose professional activity exerts considerable impact on profile of risk of bank, - the employee of bank which corresponds to any of the high-quality and/or quantitative criteria determined in Items 28-31 of the Section III of this provision;

9) division - the independent division of bank which is not part of other division of bank;

10) divisions of control division on risk management, division of control of observance of regulations (комплаенс) and division of internal audit;

11) policy of remuneration - system of approaches, the principles and methods of forming by bank of management decisions in the field of compensation (remuneration) of members of governing bodies and men of weight;

12) the program of stimulation - measure of cash and/or non-cash stimulation of the member of governing body, the man of weight based on in advance certain criteria, is one of components of remuneration and can include benefits package or privileges in cash/non-cash form (including payments in case of acceptance on work/dismissal, provision of housing or compensation for expenses on housing, compensation for expenses on insurance, additional retirement benefits, providing with the official car or compensation for expenses on use of the car in the office purposes, provision of goods and/or services free of charge or on preferential price);

13) system of remuneration set of measures of stimulation of members of governing bodies, the men of weight aimed at providing effective corporate management, internal control system including risk management, accounting of strategic objectives of bank and their achievement, and also assistance to respect for corporate values;

14) the fixed remuneration component of remuneration of the member of governing body, the man of weight, which:

is based on in advance determined criteria;

has in advance determined size in accordance with the terms of the agreement signed between bank and the worker or the staff list of bank;

reflects appropriate level of working experience and organizational responsibility as it is provided in the job description of the worker and in the conditions of the agreement signed with it;

does not depend on results of activities of bank;

it can be reviewed by introduction of amendments to the agreement or review according to the legislation of Ukraine;

it cannot be reduced, suspended or cancelled by bank;

has transparent and clear conditions of determination, charge and payment;

has permanent nature of payment throughout the entire period of accomplishment by the member of governing body, the man of weight of his (her) functions in bank;

does not stimulate to acceptance of risks which are not acceptable in case of usual conditions;

15) the financial instruments connected with own tools of the capital of bank are financial instruments which can be used by bank for payment of variable remuneration and which treat:

derivative contracts which underlying asset are bank shares or the basic indicator of which is determined, proceeding from the price, share yield of bank;

convertible bonds which provide their repayment by converting of such bonds in the corresponding number of common shares of bank.

Other terms used in this Provision are used in the values determined by the legislation of Ukraine, regulatory legal acts of the National Bank of Ukraine (further - National Bank).

II. Basic principles of forming of policy of remuneration

3. And its realization have the politician of remuneration in bank:

1) to be aimed at providing sustainable development, to be approved with the strategy of bank, to promote functioning of complex, adequate and effective risk management system and not to encourage to acceptance of risks which exceed the level, admissible for bank;

2) to be genderno neutral and to be determined taking into account need of respect for the principle of equal pay of work of workers men's and female for equal work or work of identical value.

4. Determination and the realization of policy of remuneration in bank is enabled taking into account the size, features of activities of bank, nature and amounts of banking and other financial services, profile of risk of bank, system importance of bank and activities of banking group which part the bank, observance/accomplishment of strategy of bank, the business plan, the budget and the declaration of tendency to risks is.

The procedures determined by policy of remuneration of bank shall be accurate, documented and transparent, simple for understanding and monitoring of observance.

5. The policy of remuneration is issued in the form of the internal document of bank and determines procedure:

1) realization by bank of policy of the fixed remuneration;

2) realization by bank of policy of variable remuneration for potential receipts (income) which terms and probability of obtaining are uncertain;

3) implementation of payment by bank in case of dismissal before clarification of efficiency of activities, goal achievement, accomplishment of powers.

The amount of the fixed remuneration determined by bank according to the subitem 1 of Item 5 of the Section II of this provision shall be sufficient in order that the bank had opportunity to exercise the right not to pay variable remuneration (and also to request return of already paid variable remuneration) if conditions which observance is necessary for such variable of remuneration are not satisfied.

6. The policy of remuneration shall contain procedure for determination of persons whose professional activity exerts considerable impact on profile of risk of bank and to include the following questions:

1) determination of bodies of the managements/divisions/officials responsible for determination of persons which professional activity exerts considerable impact on profile of risk of bank;

2) determination of high-quality and quantitative criteria for determination of persons whose professional activity exerts considerable impact on profile of risk of bank;

3) registration of results of determination of persons which professional activity exerts considerable impact on profile of risk of bank, approval of their list;

4) frequency (at least once a year) review of the list of persons whose professional activity exerts considerable impact on profile of risk of bank;

5) the written notice to shareholders of bank (at least once a year) and to National Bank (at least once a year and according to its requirement) about determination of persons whose professional activity exerts considerable impact on profile of risk of bank, and their list.

7. The bank annually determines, claims, at least once a year reviews the list of essential structural divisions, based on:

1) profiles of risk of structural division;

2) to the size of the capital determined by bank as available to covering of all substantial risks (the domestic capital on economic perspective is available);

3) limits of risk of structural division (business line);

4) the hazard rates and efficiency used by bank for identification, management and monitoring of risks of essential structural divisions.

8. The bank includes division which corresponds at least to one of the following criteria in the list of essential structural divisions:

1) the cumulative size of all substantial risks generated by activities of division constitutes 2% and more from the size of available domestic capital on economic perspective;

2) is responsible for the main activity and/or for provision of accompanying services which create essential sources of the income and/or profit of bank / banking group (the income/profit size received in the corresponding direction constitutes 5% and more from the size of income/profits of bank for the previous financial year according to the financial reporting checked by the subject of auditor activities in the procedure established by the legislation of Ukraine).

The bank taking into account specifics of the activities has the right to determine in policy of remuneration in addition to the criteria determined in subitems 1, 2 Items 8 of the Section II of this provision, the criteria of reference of division to the list of essential structural divisions (as the domestic capital having considerable influence on sufficiency on economic perspective).

9. Council determines, claims, at least once a year reviews and in the procedure determined by it performs assessment and control of realization of policy of remuneration which shall determine criteria for:

1) establishments of the fixed remuneration reflecting the level of working experience and organizational responsibility, considering job responsibilities of the worker;

2) establishments of variable of remuneration which reflects the consecutive and weighed taking into account risks of bank fulfillment of duties, and also the result exceeding requirements of job responsibilities of the worker;

3) applications of procedure for cancellation/return of the added/paid remuneration variable to previous periods.

10. The bank in case of establishment of variable of remuneration is guided by the following principles:

1) the amount of remuneration of the worker is determined on the basis of combination by bank of performance appraisal of this worker, the relevant structural division and total results of activities of bank (if remuneration depends on results of activities of bank). The bank in case of performance appraisal of the worker considers quantitative and high-quality criteria;

2) performance appraisal is performed by bank for the period at least four years for the purpose of providing sufficient time for realization of risks and distribution of payments of variable remuneration with parts for the period considering the strategy of bank, business cycle of bank (fluctuation of the offer of the money and bank loans granted for investments or consumption) and the business risks inherent in activities of bank;

3) variable remuneration of the members of council and workers performing the activities in divisions of control shall be based only on accomplishment of the functions assigned to the relevant body / division, achievement of the purposes connected with these functions and not to be connected or to depend on achievement by bank or divisions of the first line of protection of positive indicators of activities.

The bank when implementing payments to workers of delayed variable remuneration shall continue to estimate results of the activities, activities of structural division, activities of workers and to consider these results when implementing the corresponding payments.

11. The policy of remuneration and condition of the agreements signed between bank and members of governing bodies, men of weight shall provide that the bank charges/pays variable remuneration taking into account financial condition of bank, results of activities of bank (achievement of the planned activities indicators), structural division and workers and also provided that such payments will not have negative impact on sustainable development of bank.

The bank based on reasonable judgment taking into account the strategy of bank shall determine in policy of remuneration and/or internal documents criteria of sustainable development, indicators of financial condition, results of activities of bank, structural division and the corresponding worker on condition of which achievement payment of variable remuneration is reasonable.

12. The policy of remuneration and condition of the agreements signed between bank and members of governing bodies, men of weight shall provide reduction/cancellation/return to 100% of variable of remuneration (both the current variable of remuneration, and the amounts which are added/paid for/in previous periods), and also to determine specific criteria for application of such reduction / cancellation / return of variable of remuneration and payment method of variable of remuneration.

These criteria shall include the following cases, at least:

1) deterioration (negative dynamics) in performance indicators of activities of bank;

2) not achievement sufficiently the planned results of activities of bank;

3) the available potential risks in activities of bank which can lead to considerable deterioration in financial condition or to deterioration in reputation of bank;

4) the National Bank made the decision about:

reference of bank to category of problem;

reference of bank to category of insolvent;

withdrawal of the banking license and liquidation of bank;

conclusion from the market of systemically important bank on the bases, certain Item 15 of the Section VII "Final provisions" of the Law of Ukraine "About banks and banking activity";

5) member of body management/man of weight:

was (was) participant of actions or responsible for actions / allowed failure to act which led to considerable losses of bank;

violated standards of the commonly accepted and settled business practice / professional ethics, the code of behavior (ethics) of bank;

lost faultless goodwill;

received variable remuneration based on information which was afterwards doubtful.

13. The additional retirement benefits entered by bank (including cases of early retirement of members of governing bodies, men of weight) shall correspond to the strategy of bank, the purposes, values, long-term interests of bank and criteria of sustainable development.

The bank in case of dismissal of the member of governing body, the man of weight to retirement holds full amount of the additional retirement benefits added, but not paid to the worker in non-cash tools within five years from the date of dismissal of the worker.

The bank in case of achievement of governing body by the member, man of weight of retirement age performs for benefit of he (she) additional retirement benefits non-cash tools of which the worker cannot dispose within five years after implementation in its advantage of these payments.

The bank has the right not to apply the restrictions set in paragraphs second, third Item 13 of the Section II of this provision if the amount of the added additional retirement benefits does not exceed equivalent of 10000 euros on the official rate of hryvnia to foreign currencies established by National Bank for decision date about such charge.

14. The policy of remuneration and condition of the agreements signed between bank and members of governing bodies, men of weight shall provide effective mechanisms of prevention of transfer by members of governing body, men of weight to the third parties of risks of reduction/cancellation/return of variable remuneration by means of hedging or risks insurance (further - hedging of risks concerning remuneration).

The bank applies the requirement about prevention of use by members of governing body, men of weight of hedging of risks concerning remuneration established in Item 14 of the Section II of this provision to delayed variable of remuneration, the withheld additional retirement benefits.

15. The bank makes the decision on payment of variable remuneration taking into account the risks accepted by bank and results of acceptance of risks, financial result of activities of bank, observance of requirements concerning capital adequacy and sufficiency of liquidity.

16. The policy of remuneration determines amount of information on remuneration included in the annual statement of bank taking into account the requirements established by this Provision. The amount of information on remuneration which is subject to inclusion in the annual statement of bank cannot be less, than is established by this Provision.

17. The general meeting / the supreme body of national bank establishes/establishes amount of remuneration of the chairman and members of council.

Council establishes amount of remuneration of the chairman and board members, head and employees of division of internal audit, chief risk manager, chief komplayens-manager.

The board establishes amount of remuneration of other employees of bank if other is not stipulated by the legislation Ukraine and/or the charter of bank.

18. The policy of remuneration shall contain procedure for determination by general meeting / the supreme body of national bank (for members of council), council (for board members, the head and employees of division of internal audit, the chief risk manager, the chief komplayens-manager), board (for all other men of weight) conditions (bases) of implementation of payment and the amount of variable remuneration.

19. The general meeting / the supreme body of national bank (for members of council) or council (for board members, men of weight) identifies/establishes reasonable coefficients (ratios) between the fixed and variable parts of remuneration with observance of the fact that variable remuneration of the member of body of the management/man of weight for the corresponding financial year cannot exceed 100% of the amount of the fixed remuneration of the worker for this year.

20. The bank pays to the member of body to the management/man of weight variable remuneration for the corresponding financial year with observance of the following requirements:

1) implementation of payment of 50% and more variable remuneration (both delayed, and neotstrochenny) non-cash tools;

2) payment deferral of 40% and more variable remuneration for the period constituting at least four years (delayed remuneration).

21. The bank has the right based on reasonable judgment to choose alternative to the member of body determined in Item 20 of the Section II of this provision approach of payment to the management/man of weight of variable remuneration for the corresponding financial year with simultaneous accomplishment of the following conditions:

1) payment implementation more than 50% of variable remuneration (both delayed, and neotstrochenny) money;

2) payment deferral of 60% and more variable remuneration for the period constituting at least four years.

22. The bank makes the decision on payment deferral of 60% and more variable remuneration of the member of body of the management/man of weight for the corresponding financial year for at least four years if the amount of the variable remuneration added to him / her constitutes at least amount, equivalent 200000 euros on the official rate of hryvnia to foreign currencies established by National Bank for decision date about such charge.

23. The bank has the right not to apply the restrictions on payment of variable remuneration determined in Items 20, of 21 Sections II of this provision, to the member of body to the management/man of weight if the size to the payable such worker for the corresponding financial year of variable remuneration does not exceed the amount equivalent of 30000 euros on the official rate of hryvnia to the foreign currencies established by National Bank for date of the conclusion of agreement/enforcement of provision which establishes the specified amount of variable remuneration provided that it is intended for charge to the member of body to the management/man of weight for this year variable remuneration does not exceed 50% of the amount of the fixed remuneration.

24. The period of delay begins from the date of payment to the member of body to the management/man of weight of neotstrochenny variable of remuneration and comes to an end when variable remuneration is completely paid to the member of body to the management/man of weight or when the amount of delayed variable of remuneration is reduced to zero as a result of its reducing / cancellation. The first part of delayed variable remuneration shall not be paid earlier, than in 12 months after the beginning of the period of delay.

Delayed variable remuneration is paid in the way:

1) separation into several payments during the delay period (provided that payment amounts, made in any year of the period of delay, do not exceed 25% of all delayed variable of remuneration) or

2) complete payment at the end of the delay period.

25. The National Bank performs remuneration policy assessment in bank of its compliance to requirements of this provision and adequacy of the policy of remuneration entered in bank taking into account assessment of financial condition of bank, its business model, risks inherent of its activities, quality and efficiency of corporate management, internal control system, including risk management system, and also:

1) if necessary demands from bank of provision of explanations and additional information / documents on remuneration policy;

2) has the right to require review of policy of remuneration in bank;

3) considers results of efficiency evaluation and adequacy of the policy of remuneration entered in bank in case of SREP assessment, and also in case of determination of supervising actions concerning bank.

26. The policy of remuneration and condition of the agreements signed between bank and members of governing bodies, men of weight for implementation of payment/delay/reduction/cancellation of variable remuneration of the member of body of the management/man of weight shall provide use of system of managerial accounting (including accounts of analytics) or accounts of conditional storage (eskro) (further - escrow account).

The percent added on remaining balance of means on escrow account and not paid to the worker in connection with reducing/cancellation of variable remuneration (its parts) of the member of body of the management/man of weight return to bank.

III. Criteria of determination of persons which professional activity exerts considerable impact on profile of risk of bank

27. The bank includes in the list persons whose professional activity exerts considerable impact on profile of risk of bank, workers who correspond at least to one of the high-quality and/or quantitative criteria determined in the Section III of this provision.

28. The main high-quality criteria of reference of the worker to persons whose professional activity exerts considerable impact on profile of risk of bank is that the worker:

1) is member of governing body;

2) belongs to division managers of control;

3) treats heads of essential structural divisions;

4) is chief accountant and/or the division manager, the bank which is responsible for forming of accounting policy;

5) belongs to division managers who perform functions:

legal maintenance of activities of bank;

financial planning, including the taxation and budgeting;

economic analysis;

prevention and counteraction of legalization (washing) of income gained in the criminal way, to financing of terrorism and financing of distribution of weapons of mass destruction;

personnel management;

development and/or implementation of policy of compensation and remuneration;

maintenance of information technologies;

ensuring information security;

6) has the right to accept, to approve decisions on implementation of new products or to impose prohibition (veto) on such decisions;

7) is member of the relevant committee with the voting power responsible for acceptance, approval of the decisions specified in the subitem 6 of Item 28 of the Section III of this provision or imposing of prohibition (veto) on such decisions;

8) more than three months fulfills duties on position of the worker specified in subitems 1-7 of Item 28 of the Section III of this provision.

29. Additional high-quality criteria of reference of the worker to persons whose professional activity exerts considerable impact on profile of risk of bank at least is that the worker:

1) has the right to essential remuneration in the previous financial year on condition of simultaneous accomplishment of the following requirements:

the cumulative size added/paid to the worker in the previous financial year of remuneration is equal or exceeds the amount equivalent of 70000 euros on the official rate of hryvnia to foreign currencies established by National Bank for date(s) of implementation of charge/payment (payments) and is equal or exceeds the average size cumulative (fixed and variable) the remuneration which is added/paid for/in the corresponding year to members of governing bodies of bank;

performs the professional activity within essential structural division and such activities belong to type that has considerable influence on profile of risk of such division;

2) is division manager of the first line of protection;

3) is member of the relevant committee with voting power, responsible for acceptance of essential types of risks;

4) has powers to accept, to approve decisions, to impose ban (veto) on the decision on agreement signature about implementation of active transaction in which the credit risk is inherent if total assets on such transaction are equal or are big at least one of such two sizes:

0,5 of % of fixed capital of bank;

equivalent of 1000000 euros on the official rate of hryvnia to foreign currencies established by National Bank on acceptance date, approvals of the relevant decision or imposing of prohibition (veto) on it;

5) is member of the committee, other collegiate organ which has powers to accept, to approve the decisions specified in the subitem 4 of Item 29 of the Section III of this provision or to impose prohibition (veto) on such decisions;

6) has the right to accept, to approve decisions on transactions with the tools containing in the trade book on the amount equal or the exceeding 0,5 of % of fixed capital of bank, or to impose prohibition (veto) on such decisions;

7) is member of the committee, other collegiate organ which has powers to accept, to approve the decisions specified in the subitem 6 of Item 29 of the Section III of this provision or to impose prohibition (veto) on such decisions;

8) influences employee group which independently have powers from bank name to conclude bargains on active transactions if total assets on such transactions are equal or are big at least one of such two sizes:

0,5 of % of fixed capital of bank;

equivalent of 1000000 euros on the official rate of hryvnia to foreign currencies established by National Bank for date of the conclusion of the relevant agreement;

9) more than three months fulfills duties on position of the worker specified in subitems 1-8 of Item 29 of the Section III of this provision.

30. Quantitative criteria of reference of the worker to persons whose professional activity exerts considerable impact on profile of risk of bank at least are:

1) charge/payment to the worker in the previous financial year of remuneration on the amount equal or more amount, equivalent 100000 euros on the official rate of hryvnia to foreign currencies established by National Bank for date of implementation of charge/payment;

2) the worker's belonging to 0,3 of % of number of employees of bank (with rounding towards increase up to the next integer) by which it is added / which received the greatest amounts of remuneration in the previous financial year (provided that more than 1000 workers worked for date of implementation of the corresponding charges / payments in bank).

31. The bank taking into account specifics of the activities determines in policy of remuneration, except the criteria established in Items 28-30 of the Section III of this provision, own high-quality and quantitative criteria of determination of persons which professional activity exerts considerable impact on profile of risk of bank.

IV. Requirements to regulations on remuneration

32. The bank, based on policy of remuneration, develops regulations on remuneration of members of governing body, men of weight (further - regulations on remuneration) which shall describe system of remuneration of members of governing body, men of weight and to conform to requirements of this provision.

33. The regulations on remuneration are the internal document of bank which:

1) the evaluation procedure of accomplishment of these criteria determines the basic principles of the system of remuneration of members of governing body entered in bank, the men of weight constituting remunerations (introduction only of the fixed remuneration or combination of the fixed and variable remuneration), structure of such remuneration (types of the fixed and variable remuneration), criteria of determination of the size and/or procedure of payments of amount of remuneration (separately concerning each type of the fixed and variable remuneration);

2) contains information on the program of stimulation of members of governing body, men of weight (in the presence) which includes information on conditions of measures of cash and/or non-cash stimulation, specified in the subitem 12 of Item 2 of the Section I of this provision, and cause and effect relationship between overall performance and variable remuneration of the member of governing body, the man of weight;

3) contains the principles and parameters of system of non-cash stimulation (in the presence in bank of such system);

4) also the remuneration payment procedure in case of dismissal of the worker to retirement contains information on additional retirement benefits (including cases of early retirement of members of governing body, men of weight) (in case of introduction by bank of such payments to members of governing bodies, to men of weight);

5) is determined by distribution of powers by decision making about remuneration;

6) the procedure for creation, approval and promulgation of the report on remuneration of members of governing body determines, men of weight (further - the report on remuneration);

7) contains information on policy of bank concerning effective period of contracts with members of governing body, men of weight and inclusions in such agreements of conditions on payments for dismissal (in the presence);

8) contains information on procedure and conditions of payment of remuneration, remuneration payment method (money / non-cash tools) and payment due dates;

9) is determined by procedure for partial payment, delay, reducing/cancellation of variable of remuneration (its parts), inclusions of such procedure in conditions of contracts with members of governing bodies, men of weight in the presence in structure of remuneration of variable component;

10) the procedure for return by members of governing bodies, men of weight of the paid variable remuneration (its parts) determines, inclusion of such procedure in conditions of contracts with them;

11) contains explanations of methods which the bank applies men of weight to establishment of accomplishment of criteria for evaluation of overall performance of members of governing body;

12) contains other conditions which do not contradict the principles of system of remuneration determined by this Provision;

13) the amount of the data containing in the report on remuneration and amount of data on remuneration which can be promulgated determines taking into account the requirements established by this Provision inclusion of consent to such promulgation in conditions of agreements. The amount of data on the remuneration which is subject to promulgation cannot be less, than is established by this Provision;

Determines 14) that for implementation of payments of variable remuneration by bank [including partial payment, delay, reducing/cancellation of payment of variable remuneration (its part)] the system of managerial accounting (including accounts of analytics) or escrow account with the corresponding contractual conditions is used;

The procedure for functioning of the account specified in the subitem 14 of Item 33 of the Section IV of this provision, and inclusion of this procedure in conditions of contracts with members of governing bodies, men of weight can establish 15).

34. The regulations on remuneration have:

1) to be transparent, clear and oriented to avoidance of conflict of interest in bank, not to allow discrimination;

2) to correspond to risk management policy and to be aimed at non-admission of stimulation of acceptance of risks which exceed the admissible level in bank risk appetite;

3) to contain information on carrying out/not carrying out periodic independent external assessment of payment of remuneration in bank;

4) to conform to requirements of the bank law of Ukraine, the legislation on joint-stock companies and this provision;

5) to correspond to the system of distribution of powers created in bank in decision making (controls and counterbalances), corporate management, the code of behavior (ethics) of bank;

6) to determine that remuneration of members of governing body, men of weight shall be reasonably reasonable concerning similar (or proportional) market indicators of the sizes and conditions of payment of remuneration;

7) to determine reasonable coefficients (ratios) between the fixed and variable parts of remuneration taking into account that variable remuneration of the member of body of the management/man of weight for the corresponding financial year cannot exceed 100% of the amount of his / her fixed remuneration;

8) to determine that variable remuneration is paid only provided that its payment does not exert negative impact on financial condition of bank, results of activities of bank (achievement of the planned activities performance indicators) and also provided that such payments will not exert negative impact on sustainable development of bank;

9) to determine that payment of part of variable remuneration is deferred for the period which is determined by general meeting / the supreme body of national bank (for members of council), or council (for board members, the head and employees of division of internal audit, the chief risk manager, the chief komplayens-manager), or board (for all other men of weight) and less than four years cannot constitute. The remuneration variable share which shall be delayed is determined by general meeting / the supreme body of national bank (for members of council) or council (for board members, men of weight) and shall constitute at least 40% (for the case determined in the subitem 2 of Item 20 of the Section II of this provision) or 60% (for the cases determined in Items 21, 22 Sections II of this provision);

10) to determine that council / general meeting / the supreme body of national bank accept/make the decision concerning review towards reduction of payments for dismissal, reducing/cancellation of payment of variable remuneration, return of already paid variable remuneration in case of identification of the facts given in subitems 1-5 of Item 12 of the Section II of this provision.

V. Requirements to reports on remuneration

35. The report on remuneration shall contain information about:

1) the amounts of remuneration which were added/are paid for/in previous periods and/or shall be paid to members of governing body, men of weight by results of accounting financial year (by the fixed and variable components of remuneration, in cash and non-cash tools);

2) remuneration payment due dates (actually paid remuneration and delayed by the delay periods);

3) the description of non-cash tools in which remuneration shall be paid to members of governing body, men of weight;

4) the facts of use by bank of the right to reducing/cancellation/return earlier paid to members of governing body, men of weight of variable remuneration;

5) the violations of conditions of regulations on remuneration revealed by bank (if those were) and the measures applied by results of such violations or the made decisions.

36. The report on remuneration of members of council in addition shall contain information generalized for the corresponding financial year relatively:

1) the actual presence of the member of council at meetings of council and its committees (in case of their creation) which part such member of council is, or the reasons of its absence;

2) the confirmed facts of unacceptable behavior of the member of council of bank (including reported in the confidential way) and the measures taken by results of investigation in the presence of influence of such facts / measures on remuneration payment to the member of council of bank;

3) availability/lack of the reasonable bases on payment/delay/reduction/return of variable remuneration of the member of council.

37. The report on remuneration of board members in addition shall contain information generalized for the corresponding financial year relatively:

1) the actual presence of the board member on board meetings and its committees which part such board member is, or the reasons of its absence;

2) the confirmed facts of unacceptable behavior of the board member (including reported in the confidential way) and the measures taken by results of investigation in case of availability of influence of such facts / measures on remuneration payment to the board member of bank;

3) availability/lack of the reasonable bases on payment/delay/reduction/return of variable remuneration of the board member.

38. The report on remuneration of men of weight in addition shall contain information generalized for the corresponding financial year relatively:

1) the confirmed facts of unacceptable behavior of the man of weight (including reported in the confidential way) and the measures taken by results of investigation in the presence of influence of such facts / measures on remuneration payment to the man of weight;

2) availability/lack of the reasonable bases on payment/delay/reduction/return of variable remuneration to the man of weight.

39. The report on remuneration shall contain the following information on payments in cash and/or non-cash tools (in the presence), performed for benefit of members of governing body, men of weight in reporting financial year:

1) benefits amounts, connected with acceptance on work/dismissal;

2) market value of the remunerations paid by means of material stimulation in case of implementation of the corresponding payments by bank.

40. The report on remuneration shall contain the following information on remuneration in the form of participation of members of governing body, men of weight in the program of additional retirement benefits (in the presence of the program) in case:

1) participations in the program with fixed payments - concerning changes in the planned payments which happened within accounting financial year;

2) participations in the program with defined contributions - the fees which are rather paid by bank concerning members of governing body, men of weight within accounting financial year.

41. The report on remuneration shall contain information on provision by bank within accounting financial year of loans, the credits or guarantees to members of governing body, men of weight (with indication of the amounts and interest rates).

VI. Procedure for development, approval and promulgation of regulations on remuneration

42. The general meeting / the supreme body of national bank approves/approves Regulations on remuneration of members of council on representation of council after its preliminary consideration by committee on remunerations (if such committee in bank is created).

43. Council approves Regulations on remuneration of board members, men of weight on representation and after their consideration by committee on remuneration (if such committee in bank is created).

44. The bank in the presence of offers on modification of the Regulations on remuneration of members of council provides provision to shareholders of bank the description of the offered changes in system of remuneration in comparison with previous year (period). The bank provides consideration of question of feasibility of modification of the Regulations on remuneration of members of council on annual general meeting if necessary.

45. The bank places regulations on remuneration on own web page within 15 working days from the date of their approval / introduction of changes in them with possibility of their viewing.

VII. Procedure for development, approval and promulgation of reports on remuneration

46. The general meeting / the supreme body of national bank approves/approves the report on remuneration of members of council on representation of council after its preliminary consideration by committee on remuneration (if such committee in bank is created).

47. Council approves reports on remuneration of board members, men of weight on representation and after their consideration by committee on remuneration (if such committee in bank is created).

48. The bank places reports on the remuneration paid to members of council and boards, to men of weight within accounting financial year on own web page on the Internet within 15 working days from the date of their approval of bank by authorized body with possibility of their viewing.

 

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