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ORLEN Group 2016 Integrated Report

II nagroda specjalna w kategorii Raport Zintegrowany | Najlepszy raport on-line

Remuneration policy

Capitals:  

Remuneration for Members of the Board is determined by the Supervisory Board with consideration of recommendations of the Nomination and Remuneration Committee.

All elements of the remuneration and additional benefits are regulated by an agreement between the Member of the Management Board and the Company. On 24 January 2017, an Extraordinary General Meeting of Shareholders was held, during which resolutions were adopted concerning the rules of determining the remuneration of Management Board and Supervisory Board members.

Benefits for Management Board Members at PKN ORLEN may include a company car, life and endowment insurance, private medical insurance for the Management Board Members and for their closest family members, and potential coverage of reasonable costs of personal and property security.
Benefits for directors reporting to the Management Board at PKN ORLEN may include a company car, coverage of the costs of investment insurance premiums, right to use extra medical service for the directors and their family members, including preventive health care, sports activities and rehabilitation, co-financing of rent if the director is renting a flat, coverage of the costs of moving house during the employment period, possibility of enjoying the benefits described in the Rules of the Company Social Benefits Fund, and the right to participate in the Employee Pension Scheme in accordance with the rules in force at the Company.
 
The remuneration policy in place at PKN ORLEN supports the achievement of the Company’s goals, including in particular the long-term increase of value for shareholders and stability of functioning of the company.
 
General terms and conditions of the annual bonuses

Members of the Management Board are entitled to an annual bonus on the principles established in the contract, which includes the Bonus System Regulations for the Management Board. The level of annual bonus depends on the performance of individual tasks (qualitative and quantitative), established by the Supervisory Board for the individual Members of the Management Board. The Supervisory Board appoints each year from four to seven individual bonus tasks that are recorded in Goals Charter of the Board Member. Assessment of the performance of individual bonus tasks (quantitative and qualitative) by particular Member of the Management Board is made each year by the Supervisory Board on the Chairman of the Management Board’s recommendation, which contains assessment of individually performed bonus tasks of all Members of the Management Board, reports on the performance of bonus tasks by members of the Board, PKN ORLEN’s financial statements and other documents the investigation of which the Supervisory Board deems appropriate.
The Supervisory Board adopts a resolution to grant or not the Board Member of the annual bonus for the financial year, and its amount, by 30 April of the following year. The annual bonus will be paid if the Company's consolidated financial statements for the financial year will be approved by the General Meeting.
 
For 2016, the Supervisory Board has set for all Members of the Management Board the following six quantitative objectives:

and attributed to them relevant bonus thresholds. The Supervisory Board for each of the Members of the Management Board also established quality objectives associated with supervised by them unit.

Rules for awarding bonuses for key management personnel (including Members of the Management Board)

The regulations applicable to PKN ORLEN Management Board, directors reporting directly to the Management Board of PKN ORLEN and other key positions have certain common features. Persons covered by the above-mentioned systems are remunerated for the implementation of individual goals set at the beginning of the bonus period by the Supervisory Board for the Management Board and the Management Board for the key executive personnel. The bonus systems are consistent with the Company's Values and promote cooperation between particular employees and motivate them to achieve the best possible results for the PKN ORLEN.
The targets set are qualitative and quantitative, and are settled for after end of the year for which they were set, based on the principles adopted in the applicable Bonus System Regulations. Regulations also gives the possibility to highlight employees who have a significant contribution to the achieved results.
The rules of paying bonuses to Management Boards Members of the ORLEN Group companies in 2017 will be adjusted to the requirements resulting from the Act on the principles of determining remuneration of managing persons in certain companies.
 
Remuneration of the Members of the Management Board and the Supervisory Board of the Company due to sit on the Management or Supervisory Boards of subsidiaries, jointly controlled entities and associates

Members of the PKN ORLEN’s Management Board in 2016, who were acting as the Management or Supervisory Boards Members of subsidiaries, jointly controlled entities and associates of the ORLEN Group did not receive any remuneration, with the exception of Unipetrol a.s. wherein the payments were transferred to ORLEN’s Foundation “DAR SERCA”. As at 31 December 2016, four members of the Management Board of PKN ORLEN sat on the Supervisory Board of Unipetrol a.s.
 
The agreements with the Members about non-competition and termination on appeal from the position held

In accordance with applicable agreements, Members of PKN ORLEN’s Management Board are required for a period of 6 or 12 months from the date of termination or expiry of the contract, to refrain from competitive activities. During this period, the Management Board members are entitled to receive compensation in the amount of six or twelve monthly basic salary, paid in equal monthly instalments. The Company may waive the President and Members of the Management Board of the non-competition clause applicable after the termination or expiration of the contract or reduce the duration of the ban. In the case of an exemption from the ban of competition, the Company does not pay compensation. If the period of the ban of competition was shortened, compensation shall be in proportion to the duration of non-competition.
In addition, the agreements provide for the payment of compensation in case of termination due to dismissal from the post. Salary in this case amounts to six or twelve basic monthly remuneration. The Supervisory Board may authorize the use of these provisions also in case of resignation from the position of Member of the Management Board as Board Member.
 
Directors directly subordinated to PKN ORLEN Management Board as well as the Board members of other ORLEN Group companies are normally required to refrain from competitive activities for a period of 6 months from the date of termination or expiry of the agreement. At that time they receive a salary equal to 50% of six-month basic salary, payable in 6 equal monthly instalments. The briefing for termination of contract by the Employer is typically three or six basic monthly remuneration.
 
The agreements between Members of the Management Boards of the ORLEN Group companies in 2017 will be adjusted to the requirements resulting from the Act on the principles of determining remuneration of managing persons in certain companies.


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