ICICI Bank 2016 Annual Report Download - page 40

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Directors’ Report
Annual Report 2015-2016
Overview of the nature and type of key measures used to take account of these risks, including risk difcult to
measure
The annual performance targets and performance evaluation incorporate both qualitative and quantitative
aspects including asset quality, provisioning, increase in stable funding sources, renement/improvement of the
risk management framework, effective management of stakeholder relationships and mentoring key members of
the top and senior management.
Discussion of the ways in which these measures affect remuneration
Every year, the nancial plan/targets are formulated in conjunction with a risk framework with limit structures for
various areas of risk/lines of business, within which the Bank operates to achieve the nancial plan. To ensure
effective alignment of compensation with prudent risk taking, the BGRNC takes into account adherence to the risk
framework in conjunction with which the nancial plan/targets have been formulated. KPIs of WTDs & equivalent
positions, as well as employees, incorporate relevant risk management related aspects. For example, in addition
to performance targets in areas such as growth and prots, performance indicators include aspects such as
the desired funding prole and asset quality. The BGRNC takes into consideration all the above aspects while
assessing organisational and individual performance and making compensation-related recommendations to the
Board.
Discussion of how the nature and type of these measures have changed over the past year and reasons for the
changes, as well as the impact of changes on remuneration
The nature and type of these measures have not changed over the past year and hence, there is no impact on
remuneration.
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 the 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 WTDs and equivalent positions. The performance
assessment of individual employees is undertaken based on achievements vis-à-vis their goal sheets, which
incorporate the 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.