ICICI Bank 2016 Annual Report Download - page 191

Annual Report 2015-2016 189
Schedules
forming part of the Accounts (Contd.)
Financial Statements of ICICI Bank Limited
d) Description of the ways in which the Bank seeks to link performance during a performance measurement
period with levels of remuneration
Overview of main performance metrics for Bank, top level business lines and individuals
The main performance metrics include prots, loan growth, deposit growth, risk metrics (such as quality of
assets), compliance with regulatory norms, renement of risk management processes and customer service.
The specic metrics and weightages for various metrics vary with the role and level of the individual.
Discussion of how amounts of individual remuneration are linked to the Bank-wide and individual performance
The BGRNC takes into consideration all the above aspects while assessing organisational and individual
performance and making compensation-related recommendations to the Board regarding the level of
performance bonus for employees and the performance assessment of Wholetime Directors and equivalent
positions. The performance assessment of individual employees is undertaken based on achievements
compared to their goal sheets, which incorporate various aspects/metrics described earlier.
Discussion of the measures the Bank will in general implement to adjust remuneration in the event that
performance metrics are weak, including the Bank’s criteria for determining ‘weak’ performance metrics
The Bank’s Compensation Policy outlines the measures the Bank will implement in the event of a reasonable
evidence of deterioration in nancial performance. Should such an event occur in the manner outlined in
the policy, the BGRNC may decide to apply malus on none, part or all of the unvested deferred variable
compensation.
e) Description of the ways in which the Bank seeks to adjust remuneration to take account of the longer term
performance
Discussion of the Bank’s policy on deferral and vesting of variable remuneration and, if the fraction of
variable remuneration that is deferred differs across employees or groups of employees, a description of
the factors that determine the fraction and their relative importance
The quantum of bonus for an employee does not exceed a certain percentage (as stipulated in the
compensation policy) of the total xed pay in a year. Within this percentage, if the quantum of bonus exceeds
a predened threshold percentage of the total xed pay, a part of the bonus is deferred and paid over a
period. These thresholds for deferrals are same across employees.
Discussion of the Bank’s policy and criteria for adjusting deferred remuneration before vesting and (if
permitted by national law) after vesting through claw back arrangements
The deferred portion of variable pay is subject to malus, under which the Bank would prevent vesting of all or
part of the variable pay in the event of an enquiry determining gross negligence, breach of integrity or in the
event of a reasonable evidence of deterioration in nancial performance. In such cases, variable pay already
paid out may also be subjected to clawback arrangements, as applicable.
f) Description of the different forms of variable remuneration that the Bank utilizes and the rationale for
using these different forms
Overview of the forms of variable remuneration offered. A discussion of the use of different forms of
variable remuneration and, if the mix of different forms of variable remuneration differs across employees
or group of employees, a description of the factors that determine the mix and their relative importance
The Bank pays performance linked retention pay (PLRP) to its front-line staff and junior management
and performance bonus to its middle and senior management. PLRP aims to reward front line and junior
managers, mainly on the basis of skill maturity attained through experience and continuity in role which is
a key differentiator for customer service. The Bank also pays variable pay to sales ofcers and relationship
managers in wealth management roles while ensuring that such pay-outs are in accordance with applicable
regulatory requirements.
The Bank ensures higher proportion of variable pay at senior levels and lower variable pay for front-line staff
and junior management levels.