Annual Report 2011 - Hong Kong Monetary Authority

5. Remuneration, profi t-sharing
and loans
Introduction
Our remuneration policy forms part of the strategy, culture
and nature of our Group’s business and of each entity’s
local specificities. As such it falls within the scope of the
general policy of the Edmond de Rothschild Group, whose
aim is to foster staff loyalty and encourage each employee
to promote our long-term success through entrepreneurship
and risk control.
The policy is moreover based on the guidelines contained
in Circular 2010/1 – “Remuneration schemes” issued by the
Swiss Financial Market Supervisory Authority (FINMA),
subject to the applicable regional rules.
Powers
Under art. 3.1.2 of our Bylaws the Board of Directors is
responsible for drawing up the general remuneration policy
and the rules on the Board members’ remuneration.
Based on the annual proposals of the Executive Committee,
the Board Committee approves the overall package relating
to salary adjustments and bonuses for the staff and the
Executive Committee.
Supervision of each individual’s remuneration is delegated
by the Board to one of its members or to a committee,
depending on the entity.
Remuneration
Guidelines
Remuneration includes a fixed annual salary and a bonus,
both of which are paid in cash.
In order to spread profits over time and guarantee risk
control, certain employees with strategic duties receive
their bonus on a deferred basis.
Remuneration is set according to employees’ duties, skills,
responsibilities and experience. It also takes account of
market conditions, thanks to our participation in industry
surveys.
To avoid conflicts of interest, the fixed salaries of the persons
in charge of auditing, compliance, control and risk
management form the bulk of their remuneration. This is
submitted to the Audit Committee or its equivalent.
The Bank pays no signing bonuses. Compensation is
granted in certain cases where a new employee has lost
earnings due to his job change.
Pursuant to the Bylaws, the remuneration scheme and the
objectives assigned to employees must not induce them
not to abide by the internal control mechanisms and rules
of compliance.
Board of Directors
Each member of the Board of Directors is paid fixed fees
that vary depending on whether or not he serves on certain
committees.
Two members of the Board of Directors hold executive positions
in affiliates of the Bank. They will not seek re-election
when their terms expire.
Executive Committee and other managers
The members of the Executive committee and other managers
receive a fixed annual salary and a discretionary
bonus in line with the Bank’s earnings.
CORPORATE GOVERNANCE 43