2012 Registration document and annual financial report - BNP Paribas

A RESPONSIBLE BANK: INFORMATION ON BNP PARIBAS’ ECONOMIC,SOCIAL, CIVIC AND ENVIRONMENTAL RESPONSIBILITYSocial responsibility: pursuing a committed and fair human resources policy7A COMPETITIVE COMPENSATIONAND EMPLOYEE BENEFITS POLICY,REFLECTING A RESPONSIBLE APPROACHTO A LONG-TERM EMPLOYMENTRELATIONSHIPCompensationWork performed, skills, involvement in assigned tasks and responsibilityare compensated through a fixed salary which depends on employees’experience and market practices for each business. Variable compensationlevels are determined by individual and collective performance over theyear, based on the objectives set. Variable compensation takes differentforms in the various business lines.More generally, the Group’s compensation policy is founded uponprinciples of fairness and transparency, which are supported by a singleworldwide compensation review process and a rigorous delegationsystem. These form part of Group directives and a stronger governanceset-up, including the Compliance, Risk and Finance Committee,Executive Management and the involvement of the Board of Directors’Compensation Committee.The method used to determine individual variable compensation includesa quantitative and qualitative review of each employee’s performancerelative to the objectives set. This includes an assessment of eachemployee’s behaviour with respect to the Group’s values, ethics, teamspirit and procedures, and their contribution to controlling risks, includingoperational risk.In 2012, the Group’s personnel costs totalled more than EUR 15 billion,similar to the 2011 figure (see note 7 “Salaries and employee benefits”in chapter 4). In France, average gross annual compensation wasEUR 51,477 (fixed and variable), as opposed to EUR 51,075 in 2011.Compensation policy compliant with regulationsUnder CRD III (1) and French executive order 97-02, the Group’scompensation policy has been updated to ensure consistency betweenthe behaviour of employees whose professional activities are likely tohave a material impact on the Bank’s risk profile and the Group’s longtermobjectives, in particular with regard to risks.In accordance with this policy, a substantial portion of variablecompensation is deferred over three years, with payment subject toconditions at the end of each year, and failure to meet these conditionsmay lead to the partial or total loss of the given year’s amount. Variablecompensation is also partly indexed to BNP Paribas’ share price, in orderto align the interests of beneficiaries with those of shareholders.For employees concerned, more than 45% of variable compensation for2011 was deferred beyond 2012, and almost 50% was indexed to theBNP Paribas share price. Disclosures relating to members of the ExecutiveManagement team and individuals whose professional activities have amaterial impact on the Bank’s risk profile (information required to bemade public by article 43–1 of French regulation 97-02) will be availableon the BNP Paribas website (http://invest.bnpparibas.com/en), before theAnnual General Meeting on 15 May 2013.A range of benefits reflecting the Bank’sresponsible approach to its employeesProtection benefitsIn addition to benefits paid in accordance with legislation and companyagreements, and depending on local practices and customs in the variouscountries in which the Group operates, it may grant additional benefitsto its staff and their families, covering healthcare costs and providinga high level of protection. These benefits, which the Group’s employeesin France have enjoyed for many years, have been gradually extendedoutside France. More than three quarters of employees working forentities/subsidiaries outside France with over 150 employees havemedical cover, and over half are covered in the event of short-termdisability. The Group also offers flexible benefits, enabling employees toselect from a range of benefits on offer.Pension and savings plansIn many countries, employees are covered by defined-contributionpension plans. Through these plans, they build savings throughout theircareer and the resulting capital is used to supplement any pension paidby mandatory local systems when they retire (see note 7 to the financialstatements “Salaries and employee benefits”). Outside France, more than75% of Group entities with over 150 employees offer such plans.In France, the Group supports its employees’ savings efforts through anemployee savings plan and a retirement savings plan. In 2012, employercontributions to these savings plans totalled around EUR 51 million,including EUR 14 million for the retirement savings plan. Most employeesare also covered by funded pension plans that supplement pensions paidby national systems.Employee share ownershipAs in previous years, BNP Paribas carried out a capital increase reservedfor employees in 2012. Of the 169,000 employees eligible, more than46,000 across 68 countries bought the shares, i.e. 27% of those eligible.More than 5,000 key Group employees were awarded performance sharesunder plans lasting three to five years. The vesting of some or all of theseshares is subject to performance conditions. In early 2013, managementdecided not to allot stock options or bonus shares, and instead to setup a medium-term incentive plan including CSR criteria for the sameset of employees.At end-2012, the percentage of Group capital held directly or indirectlyby Group employees was 6% (6.2% in 2011).7(1) European Capital Requirements Directive.2012 Registration document and annual financial report - BNP PARIBAS 401