Remuneration and Nomination Committee

Purpose

The Board of Directors has established a Remuneration and Nomination Committee, in line with the requirements in the 6th principle of the Annex of the BRSA’s Regulation on Corporate Governance Principles of Banks and 4.5.1 of the Corporate Governance Principles, which is the Annex to the CMB’s Communiqué.

Composition of the Committee

The Committee is formed and authorized by the Board of Directors in accordance with the Bank’s Articles of Association, BRSA and CMB regulations. The Committee consists of at least two members elected by the Board of Directors. If the committee consists of two members, both of them, and if it has more than two members, the majority of the members are elected from non-executive Board members. The Bank’s General Manager/ Executive Chairman does not take part in the committee. The Committee may invite the Bank’s executives to its meetings and take their opinions as it deems necessary. The Committee may benefit from the opinions of independent experts on the issues it needs regarding its activities. In this case, the cost of consultancy services required by the Committee shall be covered by the Bank. All kinds of resources and support required for the Committee to fulfill its duties are provided by the Board of Directors.

Functions of the Committee

• Establishing a remuneration policy compatible with the scope and structure of the Bank’s activities, strategies, long-term goals and risk management structures, preventing excessive risk-taking and contributing to effective risk management,
• Reviewing the remuneration policy at least once a year to ensure the effectiveness of the remuneration policy of the Bank,
• Evaluating the remuneration policy and practices within the framework of risk management and submitting a report with related suggestions to the Board of Directors every year,
• Determining the suggestions of the Members of the Board of Directors and senior executives regarding the remuneration principles by taking into account the long-term goals of the Bank,
• Guaranteeing a balanced distribution between the interests and rights of senior management, Bank employees and shareholders,
• Ensuring that the members of the Board of Directors of the Bank, senior management and bank employees are rewarded in line with their contribution to the Bank’s value creation process.
• To review the independence status of the Members of the Board of Directors and to inform the Board of Directors in case of any change,
• Examining the independence of the Board of Directors from the Management and its relationship with the Management and, if deemed necessary, making recommendations regarding this relationship,
• To work on establishing a transparent system for identifying, evaluating and training suitable candidates for Senior Management positions and determining policies and strategies in this regard,
• Evaluating the candidate’s proposals for independent membership, including the management and investors, by taking into account whether the candidate fulfills the independence criteria, and submitting its evaluation to a report for the approval of the Board of Directors,
• To make suggestions to the Board of Directors on the succession plan of the senior management and senior management,
• To provide the Board Membership continuity program, which includes the following:
• Succession plans for Chairman and Deputy Chairman of the Board of Directors and Board Committees,
• Succession plans for executive and non-executive board members.
• Ensuring the existence and implementation of appropriate salary arrangements and the fulfillment of relevant disclosure standards;
• Examining the reports submitted to the Board of Directors on the following issues:
• Performance of the Board of Directors and affiliated committees,
• CEO performance,
• Performance of managers and management team,
• Package rewards, benefits, bonuses and incentives.
• To make suggestions to the Board of Directors on general employment policy, performance, fringe benefits, bonus and incentive programs.
• To make suggestions to the Board of Directors about the total and periodic changes to be made in personnel wages.
• To present suggestions to the Board of Directors regarding the share incentive plans for employees, the principles of these plans and any subsequent changes to these plans.
• To ensure that a program to introduce the Bank to new members of the board of directors is prepared, to be implemented when needed, and to ensure a continuous development program for members of the board of directors,
• To review the structure, size and composition of the Board of Directors, taking into account the needs of the Committees of the Board of Directors, and to make suggestions to the Board of Directors on necessary changes.

Working Principles of the Committee

The committee convenes as often as required by the task assigned to it, provided that it holds at least 2 meetings a year. The Chairman of the Committee invites the members of the Committee to the meeting through the Committee Secretariat. The Committee may hold its meetings physically at the Bank’s headquarters or in a different place to be determined by the Committee Chairman, or electronically. The committee convenes with the majority of the total number of members and takes a decision with the affirmative vote of the majority of the members present at the meeting. In the calculation of the quorum, fractional/half numbers are whole. Committee; without holding a meeting, the resolution proposal to be communicated to all Committee members is approved by at least the majority of the total number of members, and it may also take decisions by circulating. In the calculation of the quorum in the decisions to be taken in this way, fractional/half numbers will be complete.