46. Remuneration – PKO Bank Polski SA key management personnel

a) short-term employee benefits

Remuneration received from PKO Bank Polski SA

Remuneration received from related entities (other than the State Treasury and entities related to the State Treasury)

Short-term employee benefits are employee benefits, which fall due fully within 12 months after the end of the reporting period in which the employees render the related service. As described in the note 43 ‘The principles for determining the variable salary components policy for persons holding managerial position in the Group’ as from 2012 the variable salary component for Bank’s key management, including the Management Board, is granted in:

• non-deferred form (in the first year after the calendar year constituting a period of assessment),
• deferred form (for the next three years after the first year of the assessment period).

Accordingly, as a short-term benefit to the Bank’s Management Board non-deferred part of the variable salary component was recognised, which was paid out for the year 2013 in July 2014 and for the year 2012 in July 2013 respectively.

Moreover in 2014, the value of non-deferred salary component paid in cash for 2013 amounted to PLN 1 916 thousand without the charges (with charges PLN 1 978 thousand). In 2013, the value of non-deferred salary component paid in cash for 2012 amounted to PLN 1 553 thousand without the charges (with charges PLN 1 595 thousand).

b) other long-term benefits (in terms of variable salary components)

The deferred part of the variable salary component paid in cash and benefits from the employee pension programme were recognised as other long-term benefit.

In the year ended 31 December 2014 (July 2014), part of the deferred salary component granted in the form of cash for 2012 of PLN 357 thousand without charges, was paid out.

As at 31 December 2014, the value of the liability in respect of other long-term benefits amounted to PLN 2 082.7 thousand, i.e. PLN 2 022 thousand in cash (deferred for 2012 and 2013) and PLN 60.7 thousand worth of contributions towards EPP respectively.

In 2014, the value of the deferred salary component in the form of cash for 2013 amounted to PLN 1 321 thousand (PLN 1 578 thousand including full estimated charges) – to be paid out within 3 years. In 2013, the value of the deferred salary component granted in the form of cash for 2012 amounted to PLN 1 052 thousand net of related charges (PLN 1 257 thousand including full estimated charges) – to be paid out within 3 years.

c) share-based payments settled in cash (in terms of variable salary components)

In the year ended 31 December 2014 the Management Board of the Bank was paid PLN 1 599 thousand in respect of variable salary components without charges (with charges of PLN 1 760 thousand) (non-deferred phantom shares for 2012), granted in the form of a financial instrument i.e. phantom shares (for which conversion into cash is carried out after an additional period of retention).
In the twelve-month period ended 31 December 2013, no non-deferred, variable salary component in the form of a financial instrument for 2013 was paid out.

In 2014 and 2013 the value of liability due to such benefits amounted to PLN 4 289 thousand.

In 2014, the value of salary components (deferred and non-deferred) granted in the form of phantom shares for 2013 amounted to PLN 3 237 thousand. In 2013, the value of salary components (deferred and non-deferred) granted in the form of phantom shares for 2012 amounted to PLN 2 605 thousand without charges (PLN 3 112 thousand with estimated, full charges) - the payment will occur in 3 years.

Above-mentioned remuneration include deferred salary component granted in the form of the financial instrument, i.e. the phantom shares (for which conversion into cash is carried out after an additional period of retention) in accordance with the rules described in the note 47.
Payment of phantom shares (due part) was made in January 2015.

d) post-employment benefits

In the year ended 31 December 2014 and 31 December 2013 no post-employment benefits were paid.

e) benefits due to termination of employment

In the year ended 31 December 2014 and 31 December 2013 respectively no benefits due to termination of employment were paid.

f) loans, advances, guarantees and other advances provided by the Bank to the management

Interest conditions and repayment periods differ neither from arm’s length nor from repayment periods set up for similar bank products.