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Composition of the Human Resources and Remuneration Committee
The Human Resources and Remuneration Committee comprises of five members, consisting of an Executive Director and four Non-Executive Directors. The Human Resources and Remuneration Committee is headed by the Non-Executive Director/Chairman, Mr. M.J.C. Amarasuriya and committee members include Managing Director, Mr. A.L. Goonaratne,
Dr. H.S. Wanasinghe, Mr. Lalin J.A. Fernando and Mr. D.S. Weerakkody.
The Committee Members are nominated by the Board of Directors of the Bank.
The Managing Director who is responsible for the overall management of the Bank provides information to the Committee and participates in its deliberations. The Managing Director does not attend in relation to matters that can affect him.
Charter of the Human Resources and Remuneration Committee
The Committee is responsible for determining the compensation of the Chairman, Deputy Chairman, Managing Director and Members of the Board of Directors of the Bank. The Committee also determines the compensation and benefits of the Key Management Personnel and establishes performance parameters in setting their individual targets. In addition, they lay down guidelines and parameters for the compensation structures for all Executive Staff of the Bank and oversee the implementation of these policies.
The primary objective of compensation packages is to attract and retain a highly qualified and experienced workforce and reward their performance. In this regard, the Committee sets the criteria such as qualifications, experience and key attributes required and the eligibility, to be considered for appointment or promotion to the post of Managing Director and the Key Management Personnel.
The Committee in fulfilling above tasks reviews information concerning executive pay to bring it in line with the market rates and practices. In this connection, the Committee periodically determines the basis for revising remuneration, benefits and other payments of performance-based incentives. The compensation and benefits structure of the Bank harmonises and strengthens the performance driven culture of the Bank. During the year 2008, the Committee obtained the services of local and international companies to conduct salary surveys in order to benchmark the compensation package with the external market to ascertain the base pay and other benefits to make it attractive to the staff.
The Human Resources and Remuneration Committee recognises rewards as one of the key drivers influencing employee behaviour, thereby impacting on business results. The Committee engaged Hewitt Associates (India) to carry out a comprehensive assessment of the Bank’s compensation and benefits programme to make it more effective. Key deliverables of this project included a detailed diagnostic study of the current salaries and benefits programme, a fresh strategy around salaries and benefits for the Bank, design of pay ranges for different grades and rationalising benefits in line with market practices and organisational imperatives.
Human Resources and Remuneration
Committee meetings
The Committee held three meetings during the year under review. The attendance of committee members at meetings is stated in the table on page 59 of this Annual Report.
Members of the Senior Management of the Bank were invited to participate at meetings as and when required. The proceedings of the Committee meetings are regularly reported to the Board of Directors.
Methodology used by the Human Resources and Remuneration Committee
The Committee evaluates the performance of the Managing Director and Key Management Personnel against the pre-agreed targets and goals. The Bank’s variable pay plan is determined according to the overall achievements of the Bank and pre-agreed individual targets, which are based on various performance parameters. The level of variable pay or bonuses payable on achievement of the targets is set at the level perceived as correct to provide necessary incentives for executives at all levels including the members of the Corporate Management. The Committee makes appropriate adjustments to the bonus payable in the event of over or under achievement against pre-determined targets.
In addition, the Committee considers and recommends to the Board of Directors from time to time, the requirements of additional/new expertise. Further, the Committee assesses and recommends to the
Board on promotions of the Key Management Personnel and addresses their succession arrangements.
M.J.C. Amarasuriya
Chairman - Human Resources and
Remuneration
Committee
Colombo
February 18, 2009 |
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