Report of the Human Resources and Remuneration Committee
The Composition
The Human Resources and Remuneration Committee appointed by the Board of Directors, presently consists of three Non-Executive Directors. Mr C R Jansz is the Chairman of the Committee and Messrs G K Dayasri and A W Atukorala are the other members. Dr L P Chandradasa and Mr J E A Perumal also functioned as members of the Committee until 22 January 2015 and 30 April 2015 respectively.
The Chief Executive attended meetings by invitation and participated in its deliberations except when his own evaluation and remuneration was under discussion. He also serves as the Secretary. The Group Vice-President, Human Resources assisted the Committee by providing relevant information. The Committee obtains input from external specialists as and when required.
The Mandate
The Committee has adopted as its mandate the tasks specified in Section 3 (6) (iii) of Direction No. 12 of 2007 of the Central Bank of Sri Lanka on Corporate Governance for licensed specialized banks. The Committee in determining the remuneration policy relating to Directors, Chief Executive and Key Management Personnel of the Bank, in terms of Directions ensures appropriate compensation levels in order to attract, retain and motivate talented staff with the core capabilities matched to its strategy and also to ensure that the Bank consistently delivers value to all stakeholders and to make the organisation more competitive. To achieve this, the Committee uses a mixture of fixed and variable pay to reward employees. During the year under review, the Committee oversaw a review of the remuneration structure based on a comprehensive remuneration survey carried out by an external consultant among comparable institutions.
The Procedure
Apart from the general review of remuneration, in keeping with the policy of pay for performance, the Committee reviewed the performance of the Bank against the historical performance, key performance indicators agreed at the beginning of the year as well as against a peer group when determining and recommending to the Board the annual salary increment pool and the performance based variable pay pool for the Bank. The Committee also appraised the performance of the Chief Executive based on the pre-agreed targets and desired skills and reviewed his remuneration.
In addition, the Committee considers and recommends to the Board of Directors from time to time, the requirements of additional/new expertise/skills and also salary revisions. The Committee periodically assesses the succession plan for key management positions and took appropriate steps to induct external skills to strengthen the management of the banking business of DFCC Group where it was deemed necessary.
Meetings
The Committee held five meetings during the financial year to carry out its task. The attendance by members is given on this table.
C R Jansz
Chairman – Human Resources and Remuneration Committee
15 May 2015
