Management Remuneration & Variable Pay

Management Remuneration & Variable Pay

Guiding Principles

In line with ADCB's commitment to sound governance and promotion of long-term sustainable shareholder value, ADCB's objective is to provide transparency to shareholders and other stakeholders about its remuneration principles and incentives.

  • ADCB supports levels of remuneration necessary to attract, retain and motivate staff of the calibre necessary to lead, manage and serve in a competitive environment. However, ADCB seeks to avoid paying more than necessary for this purpose and has practices and policies in place which promote effective risk-management.
  • ADCB seeks to ensure that remuneration packages reflect duties and responsibilities, are fair and equitable and incorporate clear and measurable rewards linked to corporate and personal performance. Rewards will only be made based on the results of a rigorous appraisal process.

As far as possible bearing in mind market trends and constraints, remuneration shall align the interests of ADCB's staff with the interests of shareholders and other stakeholders, and shall blend short and long-term incentives. Performance related elements shall be designed to minimize staff turn-over and to give staff incentives to perform at the highest levels, whilst recognizing the need to promote effective risk management.

Variable Pay (VP)

The Bank's variable pay framework is comprised of variable pay schemes and a deferred compensation plan. VP is paid in addition to fixed pay to reward employees' performance during a given year based upon measurable performance targets and an objective semi-annual performance appraisal process.

VP takes into account individual, group and Bank-wide performance. Different VP schemes have been designed and adopted to differentiate between different functions of the Bank to ensure alignment to the market and to the relevant group's performance.

The VP framework includes a deferred compensation plan, under which, subject to certain thresholds, part of variable pay awards is deferred into deferred cash awards and deferred share awards. Awards are subject to thresholds, caps, claw-back rules, malus clause and deferral and retention provisions.

In line with the Bank's guiding principles for remuneration, the VP schemes have been designed in conjunction with independent external advisors to ensure alignment with best practices. In particular, they have been designed to avoid encouraging excessive risk taking and to align employees with the long term performance of the Bank.

Fixed Pay of Key Management

Fixed Pay is based on the market rate for each different role. It is influenced by each individual's contribution over the year and any fixed pay reviews depend upon the achievement of objectives and overall performance level. Fixed Pay is made up of Basic Salary and General Allowances.