Remuneration Policy

GPW remuneration policy

The incentive remuneration system for employees and managers consists of the following components: a fixed part (basic remuneration), a variable part (including the annual bonus and discretionary awards), as well as fringe benefits. Basic remuneration on GPW depends on:

• professional qualifications, expertise and experience required in the job position,
• responsibility for HR management,
• type and complexity of contacts with colleagues and third parties in the job position,
• complexity of responsibilities in the job position,
• impact of the job position on the results of the company

The base salary is also linked to key competences identified by GPW:

• embracing change / invention,
• knowledge and development,
• action orientation,
• leadership,
• co-operation and communication,
• the employees’ performance.

As an important part of GPW’s incentive scheme, the bonus system aims to create a motivating work environment which supports on-going improvement of employees’ competences and engagement in pursuit of their targets, and which fosters awareness raising and a sense of responsibility for work in all job positions. Improvement of competences implies that steps are taken which ensure that employees acquire knowledge, skills and key competences and their motivation rises, leading to more effective performance of the employees.

The bonus system covers all GPW employees other than the Exchange Management Board Members. It provides a simple and clear mechanism of calculating the annual bonus.

The system is designed to incentivise employees for superior performance by achieving operating and strategic targets set early in the year; it incentivises managers to motivate their employees. 

The bonus system includes an annual employee appraisal at the end of the year, which covers the employee’s overall performance in the bonus year. 

Managers assess employees according to the GPW key competences. Employees’ strengths and areas for improvement are identified. Development targets are set to support employee in the development of key competences. Overall, the annual appraisal includes an evaluation of both performance and competences.

GPW provides employees with a wide range of fringe benefits including health care, life insurance, partial reimbursement of commuting costs, the Employee Pension Scheme, a canteen system. GPW employees can use loans including housing and medical loans, as well as payments from the Company Social Benefits Fund. Managers are entitled to a flat-rate reimbursement of the cost of a vehicle.

For more information on the GPW employee policy, including the training policy, the recruitment policy and employee volunteering, see section 4.4 Responsible human resources policy.

Remuneration policy for GPW Management Board members

Pursuant to the Articles of Association, the power to determine the rules of remuneration of the Members of the Exchange Management Board is vested in the General Meeting and the power to determine the terms of contracts and the remuneration of the Members of the Exchange Management Board is vested in the Exchange Supervisory Board. 

The system of defining the rules of remuneration of the Members of the Exchange Management Board was approved in Resolution 3 of the Extraordinary General Meeting of 30 November 2016. The amendments introduced in the Resolution derive from the provisions of Article 2(1) of the Act of 9 June 2016 on Rules of Remuneration of Managers of Certain Companies (Journal of Laws of 2016, item 1202). The Resolution was amended by Resolution 42 of the Annual General Meeting of 19 June 2017 and Resolution 36 of the Annual General Meeting of 17 June 2019 and Resolution of the 31st Annual General Meeting of 22 June 2020.

The existing remuneration system was implemented in the Company in March 2017. The remuneration system for Members of the Exchange Management Board includes a basic part (fixed remuneration) and a variable part which constitutes supplementary remuneration (variable remuneration). Since August 2019, in addition to fixed and variable remuneration, Members of the Exchange Management Board are entitled to fringe benefits (health care, participation in the Employee Pension Plan, life insurance) determined by the Exchange Supervisory Board.

The monthly fixed remuneration of each Member of the Exchange Management Board ranges from 4 times to 8 times the average monthly remuneration in the enterprise sector net of profit bonuses for the fourth quarter of the previous year, as announced by the President of the Central Statistical Office (GUS).

The variable remuneration depends on the performance of management targets and it cannot be more than 100% of the fixed remuneration in the previous financial year. The management targets include growth of the Company value and improvement of its financial indicators. The Exchange Supervisory Board defines specific management targets and their weights as well as objective and measurable criteria (indicators) of their performance. Other management targets on which variable remuneration depends include: (1) development and application of rules of remuneration of members of management and supervisory authorities in accordance with the provisions of the Act, and (2) performance of the obligations defined in Articles 17-20, Article 22 and Article 23 of the Act of 16 December 2016 on Management of State Assets (Journal of Laws of 2016, item 2259).

The previous remuneration system for the Members of the Exchange Management Board was based on a long-term incentive system. It consisted of a fixed part (basic remuneration), a variable part (incentive system, i.e., discretionary annual bonus), as well as fringe benefits to the extent defined by the Exchange Supervisory Board.

The variable part of remuneration, i.e., the discretionary annual bonus, could be awarded provided that the following criteria were met:

• the Company reported a net profit for the financial year for which the discretionary bonus was to be awarded,
• the member of the Exchange Management Board was employed as at the 30th day after the publication of the consolidated financial statements of the GPW Group,
• the Members of the Exchange Management Board were granted a vote of discharge of their duties for the last bonus year.

The amount of the bonus for Members of the Management Board depended on semi-annual appraisal of performance and the Company’s results performed by the Exchange Supervisory Board, as well as verification of results of work of the Exchange Management Board Members in previous bonus years.

The Exchange Supervisory Board performed an annual appraisal which could determine the grant and the amount of the discretionary bonus awarded to a Management Board Member. The maximum amount of the discretionary annual bonus was capped as a percentage of annual basic remuneration. Payments of the awarded discretionary bonus were made as follows:

• 30% of the awarded bonus paid on a one-off basis,
• 30% paid in phantom shares, which are paid out one year after the award¹
• 40% of the awarded bonus was added to the bonus bank and settled in equal parts in the next three years subject to positive reassessment by the Supervisory Board of the work taken in the period of the bonus.

The discretionary bonuses to the Exchange Management Board under the previous remuneration scheme will have been settled by the end of 2020.

In addition to the foregoing, the Company has no incentive or bonus schemes based on the issuer’s equity (including schemes based on bonds with pre-emptive rights, convertible bonds, subscription warrants, or stock options).

Terms of employment of GPW Management Board members

The current four-year term of office of the Management Board of the Warsaw Stock Exchange started on 26 July 2018. 

In 2019, the Management Board of Giełda Papierów Wartościowych w Warszawie was comprised of Marek Dietl as President, Jacek Fotek as Vice-President, Dariusz Kułakowski as Member of the Management Board, Piotr Borowski as Member of the Management Board, and Izabela Olszewska as Member of the Management Board.

Management contracts were signed with all Members of the Management Board of Giełda Papierów Wartościowych w Warszawie.

Management contracts for the term of the function may be terminated by agreement of the parties with a notice of two weeks or effective immediately in the case of a serious breach of the contract by the manager or by the Company. According to the contract, if the contract is terminated due to termination of the function for any reason other than the manager’s breach of essential obligations under the contract, the Management Board Member is entitled to a severance pay equal to three times the fixed salary provided that the Management Board Member performed the function for at least 12 months before termination.

The Exchange Supervisory Board inserted non-competition clauses effective for the term of the contract and after termination into the management contracts. If a management contract of a Management Board Member who performed the function for at least 3 months is terminated, the Management Board Member is entitled to damages for a period of six months equal to 100% of the remuneration paid in equal monthly instalments. The non-competition clause may be terminated by agreement of the parties or by the Company with a notice of one month or effective immediately in the case of a breach of the clause by the manager.

Remuneration of exchange Supervisory Board members

According to the Articles of Association, the Exchange Supervisory Board Members receive remuneration in the amount set by the General Meeting.

According to the Resolution of the Extraordinary General Meeting of the Company of 30 November 2016, the monthly remuneration of the Exchange Supervisory Board Members was determined as equal to 1.5 times the average monthly remuneration in the enterprise sector net of profit bonuses for the fourth quarter of the previous year, as announced by the President of the Central Statistical Office (GUS).

The amount of remuneration is raised by a percentage of the monthly remuneration as follows:

• For the Chairman of the Exchange Supervisory Board – 10%,
• For the Deputy Chairman of the Exchange Supervisory Board – 9%,
• For the Secretary to the Exchange Supervisory Board – 8%,
• For Chairmen of Committees of the Exchange Supervisory Board – 9%,
• The additional remuneration is not aggregated.

Exchange Supervisory Board Members held no supervisory or management functions in any other entities in the GPW Capital Group.

Evaluation of the remuneration policy

The Company’s remuneration policy based on an incentive system directly supports the implementation of GPW’s business strategy. The Company’s remuneration system is based on fixed remuneration and variable remuneration under the incentive system. The remuneration system also includes other factors such as: professional qualifications, expertise and experience required in the job position, responsibility for HR management, type and complexity of contacts with colleagues and third parties in the job position, complexity of responsibilities in the job position, impact of the job position on the results of the company.

The remuneration policy differentiates between pay levels depending on the job position, performance, and competences. The variable component provides flexibility and aligns the system with the implementation of GPW’s strategy. The incentive system links the Company’s management with the goals of the GPW strategy and cascades the goals to employees, thus supporting GPW’s business.

The extensive system of employee benefits is competitive on the market while ensuring cost efficiency for the Company. As a part of the HR strategy, the remuneration policy consistently helps to recruit, retain, and incentivise employees.