Remuneration Related to Risk
Key Risks in Determining Remuneration
In setting out the remuneration strategy, particularly variable remuneration, BCA considers credit risk and operational risk to be the key risk. Credit risk and operational risk has been BCA’s key risk in 2021 and the previous years.
The credit risk and operational risk is attached to the types of transactions and businesses that are most significant in generating profits for BCA.
Impacts of Key Risks on Remuneration
The determination of the key risk types have an impact on the stipulation of the Key Performance Indicator and the provision of variable remuneration.
Performance Measurements Related to Remuneration
Performance Measurement Indicators in Determining the Remuneration of the Members of The Board of Directors
The indicators used in determining the remuneration of the members of the Board of Directors include:
• Performance of each member of the Board of Directors;
• BCA’s financial performance;
• Industrial benchmarks;
• Risk that may arise in the future resulting in loss to BCA.
Performance Measurement Indicators in Determining the Remuneration of the Employees
BCA’s performance appraisal system is carried out objectively and with employee development in mind:
1. Performance appraisals take into account work performance and the company’s core values where:
• The worker accomplishment involves the achievement of the set work targets/goals.
• The demonstration of the company’s core values is inherent in the behavior exhibited by the employees when carrying out their duties and responsibilities.
2. The results of the performance appraisal combined with employee competency assessment become a reference point for determining the direction of employee development.
Impact of BCA Performance, Work Unit Performance, and Individual Performance on Remuneration
BCA’s performance influences the amount of remuneration, especially variable remuneration.
Individual performance is reviewed every 1 (one) year.
The result of individual performance appraisals is used as the basis for bonuses, promotions, rank reviews and wages/salary increases.
Performance measurements are based on the agreed upon performance at the beginning of the year.
Bonuses are given based after an assessment of individual performance, where the determination parameters have been based on decrees and circular letters. For evaluation of the achievement of business/
work targets that are quantitative in nature, the assessment guidelines are used, i.e. exceeding the target (> 110%), achieving the target (100-110%), and achieving some of the target (80-99%).
Remuneration Adjustments Related to Risk and Performance 1. Deferred Variable Remuneration
For Material Risk Takers (MRT), including all members of the Board of Commissioners, 15% of tantiem is deferred and paid in cash and shares, as follows:
a. 5% in cash;
b. 10% in the form of shares that are inaccessible during the withholding period.
Specifically for Independent Commissioners, the deferred tantiem is entirely in cash form.
2. Postponed Payments (Malus) or Withdrawn Payments (Clawback)
In certain conditions, the tantiem that has been paid to the Material Risk Takers (MRT) in cash or shares can be withdrawn.
3. Withholding Period
The withholding period is 3 (three) years from the first-time variable remuneration is paid. An equal withholding period is applicable for all MRT.
A. Determination Procedures for the Remuneration of the Board of Commissioners and the Board of Directors
The remuneration of the Board of Commissioners and the Board of Directors is based on the procedures, structures, and indicators set out in BCA’s Article of Association as well as the Decree No. 060/SK/KOM/2018 dated April 3, 2018 concerning the Board of Directors and the Board of Commissioners Remuneration Policy, which is in accordance with:a. OJK Regulation No. 45/POJK.03/2015 regarding the Implementation of Governance in the Provision of Remuneration at Commercial Banks.
b. OJK Regulation No. 55/POJK.03/2016 regarding the Implementation of Governance at Commercial Banks.
c. OJK Circular Letter No. 40/SEOJK.03/2016 regarding the Implementation of Governance in the Provision of Remuneration at Commercial Banks.
1. The Proposal and Determination of Remuneration’s Scheme
RNC submits to Board of Commissioners the result of evaluation and
recommendation of remuneration policy of Board of Commissioners
and Board of Directors to be submitted to the
GMS
The Board of Commissioners proposes
the determination of remuneration to the
GMS
The GMS determines the remuneration for members of the Board
of Commissioners and the Board of Directors
The determination of remuneration for the members of Board of Commissioners and the
Board of Directors is based on the decision
made by the GMS
Based on the resolution of the BCA Annual GMS held in 2021, power and authority has been given to:
a. The Board of Commissioners to determine the salary and other allowances for the members of the Board of Directors, taking into account the recommendations of the Remuneration and Nomination Committee.
b. The BCA majority shareholders to determine the salary and other allowances to be paid to the members of the Board of Commissioners.
c. The BCA majority shareholders to determine tantiem distribution among the members of the Board of Commissioners and the Board of Directors.
2. Remuneration of the Board of Commissioners
Remuneration Structure of the Board of CommissionersThe remuneration package and facilities received by the Board of Commissioners include the remuneration structure and details nominal amount, as listed in the table below:
Types of Remuneration and Facilities
Amount Received in 1 (one) Year
2021 2020
Person Million Rp Person Million Rp
Salary, routine allowance, tantiem, and other non-natura facilities
5 156,560 5 132,750
Other facilities (housing, health insurance, etc):
1. Can be possessed - - - -
2 Cannot be possessed - - - -
Total 5 156,560 5 132,750
The remuneration package is classified into income levels received by the Board of Commissioners in 1 (one) year, as indicated in the table below:
3. Remuneration of the Board of Directors
Indicators for the Determination of the Remuneration for the Members of the Board of Directors
The indicators for the determining of the remuneration of the members of the Board of Directors include:
a. Performance of individual member of the Board of Directors.
b. Financial performance and reserve fulfillment as stipulated in the Law No. 40 Year 2007 on Limited Liability Companies.
c. Fairness.
d. BCA’s position as compared to several other similar banks, among others, in terms of assets and characteristics.
e. Consideration of BCA’s long-term goals and strategy.
Remuneration Structure of the Board of Directors
The remuneration package and facilities received by the Board of Directors include the remuneration structure and details of the nominal amount, as in the table below:
Types of Remuneration and Facilities
Amount Received in 1 (one) Year
2021 2020
Person Million Rp Person Million Rp
Salary, bonus, routine allowance, tantiem, and other non-natura facilities
12 496,055 12 464,414
Other facilities (housing, health insurance, etc):
1. Can be possessed - - - -
2. Cannot be possessed - - - -
Total 12 496,055 12 464,414
The remuneration package is classified into income levels received by the Board of Directors in 1 (one) year, as indicated in the table below:
Total Remuneration per Person in 1 (one) Year *) Number of Recipients in 1 (one) Year
2021 2020
Above Rp2 billion 12 12
Between Rp1 billion and Rp2 billion - -
Between Rp500 million and Rp1 billion - -
Below Rp500 million - -
Note:
*) received in cash
B. Variable Remuneration
Variable remuneration consists of cash and shares.
Shares are in the form of extra bonuses that are spent on BCA shares and inaccessible for 3 (three) years from the bonus disbursement.
Extra bonuses in form of BCA shares have the following objectives:
• Show appreciation for the employee’s contribution throughout the year;
• Foster a sense of belonging among employees to increase their engagement;
Distribution of variable remuneration, which is the bonus budget (cash and shares), is based on position levels:
1. Board of Directors and Board of Commissioners ; 2. S1-S3 echelon employees ;
3. S4-S8 echelon employees.
The underlying consideration of the differences in the distribution of variable remuneration is the impact of the position on the achievement of company performance, so that the higher the level of the position, the greater the bonus budget.
The Number of Commissioners, Directors, and Employees Who Received Variable Remuneration
The Number of Directors, Commissioners, and employees who received the Variable Remuneration in 1 (one) year and the nominal total:
Year
Total Variable Remuneration in 1 (one) Year
Board of Commissioners Board of Directors Employees
Person Million (Rp) Person Million (Rp) Person Million (Rp)
2021 5 83,690 10*) **) 296,700 23,468 1,864,847
2020 5 88,430 10 327,450 23,491 2,277,288
Notes:
*) Mr. Henry Koenaifi and Mr. Erwan Yuris Ang ended their office terms at the AGMS on March 29, 2021.
**) Mr. Frengky Chandra Kusuma served as Director based on OJK Letter No. 39/KDK.03/2021 dated April 26, 2021 and Mr. John Kosasih serves as Director of Compliance based on OJK Letter No. 40/KDK.03/2021 dated April 26, 2021.
Share Option received by Board of Directors, Board of Commissioners, and Executive Officers
There were no share options received by Board of Directors, the Board of Commissioners and the Executive Officers during 2021.
Variable Remuneration that is Unconditionally Guaranteed for the Board of Commissioners Candidates, the Board of Directors Candidates, and/or Employee Candidates
No variable remuneration is unconditionally guaranteed for the Board of Commissioners Candidates, the Board of Directors Candidates, and/or Employee Candidates during the first 1 (one) year of service.
Deferred Variable Remuneration for MRT
Total deferred variable remunerations Rp39,940,100,000.00, which consists of cash and/or shares or stock-based instruments issued by BCA, in 2021 included:
1. In cash : Rp19,320,200,000.00 2. In shares : Rp20,619,900,000.00
C. Remuneration at BCA for MRT
The Amount of Remuneration Granted in 1 (one) Year
The details of the amount of remuneration granted in 1 (one) year include:
1. Fixed and variable remuneration;
2. Deferred and non-deferred remuneration; and
3. Remuneration granted in cash and/or shares or stock-based instruments issued by BCA.
as indicated in the table below:
A. Fixed Remuneration *) 2021 2020
1. In Cash 272,225 181.284
2. Shares/stock-based instruments issued by BCA - -
B. Variable Remuneration *)
2021 2020
Deferred Non-Deferred Deferred Non-Deferred
1. In Cash 340,450 19,320 376,338 22,065
2. Shares/stock-based instruments issued by BCA **)
- 20,620 - 24,678
Quantitative Information
Quantitative information related to the total remaining postponed remuneration, whether it is exposed to implicit or explicit adjustments, the total remuneration deduction caused by explicit adjustments during the reporting period, and the total remuneration deduction due to implicit adjustments during the reporting period are as follows:
Total Variable Remuneration
2021 2020
Deferred shares
Total Deduction during reporting report
Deferred shares
Total Deduction during reporting report Due to
explicit adjustment
(A)
Due to implicit adjustment
(B)
Total (A)+(B)
Due to explicit adjustment
(A)
Due to implicit adjustment
(B)
Total (A)+(B)
1. In cash (in million rupiah)
- - - - - - - -
2. Shares/stock-based instruments issued by BCA (in shares and nominal million rupiah which is a conversion the shares)
642,320 shares *)
- - - 859,032
shares
- - -
Note:
*) Purchases are made before the stock split with ratio of 1: 5
D. Salary and Severance Payments Data Ratio
Highest and Lowest Salary RatiosSalary Ratio 2021 2020
The highest and lowest salary of employees ratio 24.55 22.97
The highest and lowest salary of Board of Directors ratio 2.89 2.7
The highest and lowest salary of Board of Commissioners ratio 1.52 1.62 The highest salary of Board of Directors and highest salary of employees
ratio
9.81 8.91
Ratio of Annual compensation of the President Director and median mean of the annual compensation of all employees (other than the President Director)
106.30 90.22
Number of Employees Who Have Been Terminated and Total Nominal Value of Severance Payments
The total number of employees affected by termination of employment including entering retirement age, early retirement and termination of employment at their own request and the total nominal severance paid are shown in the table below:
Total Nominal Severance Paid for 1 (one) Person in 1 (one) Year Number of Employees
2021 2020
Above Rp1 billion 339 people 231 people
Between Rp500 million and Rp1 billion 642 people 476 people
Below Rp500 million 523 people 513 people