REMUNERATION OF EXCHANGE MANAGEMENT BOARD MEMBERS
The remuneration system for the members of the Exchange Management Board is based on a long-term incentive system. It consists of a fixed part (basic pay) and a variable part (incentive system, i.e., bonus) as well as additional benefits to the extent defined by the Exchange Supervisory Board. The bonus system for the Management Board Members was modified in 2014: the bonus depends on semi-annual appraisal of individual performance and the Company’s results by the Exchange Supervisory Board, as well as verification of results of work of the Exchange Management Board Members in previous years. In addition, the maximum discretionary bonus which can be awarded by the Exchange Supervisory Board in a given year is capped. Payments up to the maximum amount of the awarded discretionary bonus are made as follows:
- 30% of the awarded bonus paid on a one-off basis;
- 30% paid in phantom shares;
- 40% of the awarded bonus is 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 system was based on similar rules in the past years, i.e., it operated as a long-term incentive system (bonus bank). A bonus was awarded depending on the achievement of a number of development and financial targets. Up to a capped maximum bonus amount, the Exchange Supervisory Board could award Management Board Members with a discretionary bonus that was not closely linked to development and financial targets but was based on an assessment of the performance of individual annual targets.
The Company has no incentive or bonus systems based on the issuer’s equity (including programmes based on bonds with pre-emptive rights, convertible bonds, subscription warrants, or stock options).
Pursuant to the Articles of Association, the power to determine the terms of the employment contracts and the amount of remuneration of the President and the other members of the Exchange Management Board has been vested in the Exchange Supervisory Board. However, the terms of the employment contracts and the amount of remuneration of the other members of the Exchange Management Board are determined upon the request of the President of the Exchange Management Board.
In 2014, the Management Board Members of the new term of office decided to forego remuneration for sitting on the authorities of subsidiaries and associates of the WSE Group.
 Form of remuneration where a certain number of virtual (phanotm) shares are allocated for a period of time. The block of such shares authorises the manager to draw phantom payments in an amount depending on the WSE share price on the exchange.
Remuneration and other benefits of the members of the Exchange Management Board in 2014 (PLN thou.)
|Fixed part||Variable part (bonus)||Long-term liabilities||Other benefits||Termination benefits||Subsidiaries and associates||Total|
|Phantom shares||Bonus bank|
Remuneration and other benefits of the members of the Exchange Management Board in 2013 (PLN thou.)
|Fixed part||Variable part (bonus)||Bonus – long-term liabilities||Other benefits||Termination benefits||Subsidiaries and associates||Total|
 Bonus – long-term liabilities for 2011 settled in 2013 and presented under “Variable part (bonus)”
TERMS OF EMPLOYMENT CONTRACTS WITH MEMBERS OF THE EXCHANGE MANAGEMENT BOARD
Employment contracts with the Members of the Exchange Management Board of the new term of office were signed for a determined period, i.e., until the expiry of the mandate at the end of the four-year term of office. The contracts may be terminated by the Company or a Management Board Member with a notice of three months or by arrangement of the parties.
The Company executed employment contracts with the following members of the Exchange Management Board:
Employment contracts with members of the Exchange Management Board as at 31 December 2014
|Date of the contract||Period||Position|
|Paweł Tamborski||25 July 2014||fixed term – until the end of term of office||President of the Management Board|
|Grzegorz Zawada||28 August 2014||fixed term – until the end of term of office||Vice-President of the Management Board|
|Karol Półtorak||9 September 2014||fixed term – until the end of term of office||Vice-President of the Management Board|
|Mirosław Szczepański||25 July 2014||fixed term – until the end of term of office||Vice-President of the Management Board|
|Dariusz Kułakowski||25 July 2014||fixed term – until the end of term of office||Vice-President of the Management Board|
The Exchange Supervisory Board signed non-competition agreements with the Members of the Management Board which will take effect after the termination of employment for a term of 3 months (if an employment contract is terminated during the term of office) or 6 months (after the end of the term of office in the event of no re-appointment for the next term of office). The non-competition agreements may be terminated by the Company within 30 days of termination of the employment contract.
The composition of the Management Board changed on the end of the term of office of the Management Board in 2014. The employment contracts with the Members of the Management Board of the previous term of office were terminated on the expiry date of the mandate, i.e., 25 July 2014. In 2006, the Exchange Supervisory Board signed with the then Members of the Management Board non-competition agreements whereby the Members of the Management Board cannot engage in activities competitive to the Company within 12 months after the termination of the employment contracts with the Company. In the term of the non-competition agreements after the termination of employment, the Members of the Management Board are entitled to receive compensation at 100% of the gross basic remuneration in the period of 12 months before the termination of employment, paid in 12 equal monthly instalments.
Further to the foregoing, under concluded the non-competition agreements, the Company pays Adam Maciejewski compensation of PLN 79,000 (per month) and Beata Jarosz PLN 50,497.22 (per month).
On 7 October 2014, the Company and Beata Jarosz concluded an agreement concerning the monthly compensation under the non-competition agreement. The compensation is reduced with the monthly gross income earned by Beata Jarosz following her employment by the Polish Power Exchange as of December 2014.
The non-competition agreements are in force until 31 July 2015.
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. Pursuant to the latest Resolution of the Company’s Ordinary General Meeting of 25 July 2014, the amount of monthly remuneration of the Exchange Supervisory Board members has been set as follows:
- Chairman of the Exchange Supervisory Board – 2 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);
- Deputy Chairman of the Exchange Supervisory Board, Secretary to the Exchange Supervisory Board, Member of the Exchange Supervisory Board – 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).
Remuneration of the Supervisory Board members (PLN thou.)
|31 December 2014||31 December 2013|
 Paweł Graniewski was delegated to perform functions of a Member of the Exchange Management Board from 10 January 2013 to 9 April 2013. During that period, he received monthly remuneration in an amount of the average base remuneration of Members of the Exchange Management Board.
Exchange Supervisory Board members have no supervisory or management functions in WSE subsidiaries.