REMUNERATION POLICY OF RAIFFEISEN INVESTMENT FUND MANAGEMENT HUNGARY (RIF)

Transcription

1 REMUNERATION POLICY OF RAIFFEISEN INVESTMENT FUND MANAGEMENT HUNGARY (RIF) Raiffeisen Investment Fund Management Cmpany Page 1 f 17

2 Table f Cntents 0 Executive Summary Scpe and regulatry framewrk Cmpensatin Principles Base Pay Variable Cash Pay Step-In-Criteria fr payment f variable cmpensatin Prvisins in case f negative PAT Specific Cmpensatin Principles applicable within RIF Selectin f Identified Staff Categries f staff t be included Prprtinality fr categries f staff Selectin Prcess Specific Cmpensatin Principles applicable t Identified Staff Overview Perfrmance assessment Equity Instruments and Retentin Deferral, Precnditins fr payment and ex-pst incrpratin f risk Deviatins frm Specific RZB Grup Cmpensatin Principles based n lcal legislatin Bnus Pay-ut Mdels General Bnus Pay-ut Mdel fr Fully Affected Identified Staff Bnus Pay-ut Mdel fr Partially Affected Identified Staff Equity Instruments Requirement t use Equity Instruments Phantm Investment Fund Unit Retentin perid Changes in functins and jbhlders subject t Identified Staff categry during the year Ex- pst incrpratin f risk fr variable remuneratin (Malus / Clawback events) Malus Clawback Prhibitin f Persnal Hedging Gvernance General Crprate Directive and Identified Staff selectin Supprt and cntrl functins f RIF Supprt and cntrl functins f RZB / RBI Grup Decisin making bdies Reprting Disclsure Dcument Histry...17 Raiffeisen Investment Fund Management Cmpany Page 2 f 17

3 Apprved by RIF Supervisry Bard In frce since With immediate effect after release Raiffeisen Investment Fund Management Cmpany Page 3 f 17

4 List f Abbreviatins Abbreviatin Explanatin AIFMD The Alternative Investment Fund Managers Directive 2011/61/EU which entered int frce n 22 July Bard Bard f Management Bnus pl Has such meaning as set ut in sectin [2.2.] Base Pay Fixed cmpnent f ttal cmpensatin as described in sectin [2.1.] BWG Austrian Banking Act CORE Cuntry Respnsible (Bard Member) Clawback has such meaning as set ut in sectin [3.6.2.] CRD III Directive Directive 2010/76/EU Deferral has such meaning as set ut in sectin [3.2.3] Equity Instruments has such meaning as set ut in sectin [3.2.2.] Fully Affected Identified Staff has such meaning as set ut in sectin [3.1.2.] General RZB Grup Cmpensatin principles applicable t all emplyees as described in Cmpensatin sectin [2] Principles Grup Directive Grup Directive CRD III Remuneratin Principles V 1.1 HR Human Resurces Identified Staff has such meaning as set ut in sectin [3.1.] Act XVI f 2014 n Cllective Investment Schemes and their Managers, Law which is aimed at implementing the AIFMD in Hungary and entered int frce n 15 March 2014 Malus has such meaning as set ut in sectin [3.6.1.] Neutralizatin has such meaning as set ut in sectin [3.1.2.] NWB Netwrk Bank NWU Netwrk Unit meaning such subsidiaries f RZB r RBI which are Units Affected by the Grup Directive Partially Affected Identified Staff has such meaning as set ut in sectin [3.1.2.] Phantm Investment Fund has such meaning as set ut in sectin [3.4.2.] Phantm Investment Fund Unit has such meaning as set ut in sectin [3.4.2.] Prprtinality Principle has such meaning as set ut in sectin [3.1.2.] REMCO f RIF Remuneratin Cmmittee f RIF which cnsists f thse members f RIF s Bard f Directrs wh d nt perfrm any executive functins in RIF REMCO f RZB Remuneratin Cmmittee f RZB s SB Retentin has such meaning as set ut in sectin [3.2.2.] RBHU Raiffeisen Bank Zrt. RBI Raiffeisen Bank Internatinal AG RZB Raiffeisen Zentralbank Österreich AG RZB Grup RZB and all cmpanies f the RZB Credit Institutin Grup accrding t 30 BWG RBI Grup RBI and Affected Units which are subsidiaries f RBI including Branches ROE Return n Equity RIF Raiffeisen Investment Fund Management Hungary SB Specific RZB Grup Cmpensatin Principles Supervisry Bard Cmpensatin principles applicable t Identified Staff nly as described in sectin [3] Step-in-criteria has such meaning as described in sectin [2.2.1] Raiffeisen Investment Fund Management Cmpany Page 4 f 17

5 0 Executive Summary This Remuneratin Plicy reflects and implements the regulatry requirements with respect t remuneratin principles as prvided fr in the Law as well as the Grup Directive (based n BWG and CRD III Directive). The cmpensatin principles prvided fr in the CRD III Directive and 39b BWG shall be applied by credit institutins at grup, parent cmpany and subsidiary levels, including thse subsidiaries established in ffshre financial centres. Therefre these principles are f significance and have t be cnsidered fr the whle RZB Grup based n the Prprtinality Principle and by taking int accunt each cmpany`s (ptential) impact n RZB Grup s / RBHU Risk Prfile/Risk Psitin. On the basis f the Grup Directive the RZB and the RBI Bard decided that RIF shall be subject t Limited Applicatin f the Grup Directive. Therefre RIF is bliged t implement - in cmpliance with specific lcal mandatry regulatins and requirements - all principles set ut by the Grup Directive. Whenever the regulatins and requirements f the Law and the Grup directive are in cnflict, thse f the Law shall apply. 1 Scpe and regulatry framewrk The Remuneratin Plicy fulfils an internatinal standard fr an bjective, transparent and fair cmpensatin structure in cmpliance with regulatry guidelines. The remuneratin system f RIF is cnsistent with and prmtes sund and effective risk management and des nt encurage risktaking that exceeds the level f tlerated risk. This Remuneratin Plicy is in line with the business strategy, bjectives, values and lng-term interests f RIF and the investment funds it manages r the investrs f thse investment funds and incrprates measures t avid cnflicts f interest. Our bjective is t attract and retain a mtivated and qualified wrkfrce and reward emplyees fr managing the future challenges f RIF in line with sund and effective risk management. RIF pays n discretinary pensin benefits t its emplyees. The Remuneratin Plicy shall apply t remuneratin f any type paid by RIF, t any amunt paid directly by the managed investment funds itself, including carried interest, and t any transfer f units f the managed investment funds, made t the benefits f thse categries f staff, including senir management, risk takers, cntrl functins and any emplyee receiving ttal remuneratin that takes them int the same remuneratin bracket as senir management and risk takers, whse prfessinal activities have a material impact n their risk prfile r the risk prfiles f the investment funds that they manage. The Remuneratin Plicy is based n fllwing regulatry initiatives: Act XVI f 2014 n Cllective Investment Schemes and their Managers Act CCXXXVII f 2013 n Credit Institutin and Financial Enterprises Act CXXXVIII f 2007 n Investment Firms and Cmmdity dealers, and n the regulatins gverning their activities Gvernment decree 131/2011. (VII.18.) n the adaptatin f Remuneratin plicy Recmmendatin N. 3/2011 (VIII.04.) f the Chairman f the Hungarian Financial Supervisry Authrity n the applicatin f the remuneratin plicy (HFSA s Guideline ) RBI Bard decided that in case f RIF the fllwing Specific RZB Grup Cmpensatin Principles may nt be applied ( Neutralizatin ): - Variable remuneratin in Equity Instruments (see sectin ) - Retentin (see sectin ) - Deferral (see sectin ) - ex pst incrpratin f risk fr variable remuneratin (Malus and Clawback see sectin / 3.6.2) On the basis f the Law such Neutralizatin d nt apply with respect t the remuneratin f executive members f RIF s crprate bdies, senir management and certain RIF emplyees ( Fully Affected Identified Staff as described in sectin and 3.3.2). Raiffeisen Investment Fund Management Cmpany Page 5 f 17

6 In any case RIF and n subsidiary f RIF shall be used t circumvent the Law and this Remuneratin Plicy as well as the Grup Directive by emplying and remunerating staff t which this Remuneratin Plicy r the Grup Directive shuld therwise apply. 2 Cmpensatin Principles Cmpensatin principles supprt the business strategy and the lng-term cmpany targets, interests and values. Cmpensatin principles incrprate measures t avid cnflicts f interests. Cmpensatin principles & plicies are cnsistent with and prmte sund and effective risk taking management practices and avid incentives fr inapprpriate risk taking that exceed the tlerated risk f the institutin. The ttal variable remuneratin des nt limit the ability f RIF t strengthen its capital base. Variable remuneratin is nt paid thrugh vehicles r methds that facilitate the avidance f the requirements f the Remuneratin Plicy. Emplyees engaged in cntrl functins are cmpensated independent f the business unit they supervise, have apprpriate authrity and their remuneratin is determined n the basis f achievement f their rganizatinal bjectives, regardless f the results f the business activities they mnitr. Guaranteed variable payments are used nly n exceptinal basis and may be granted in the first year f emplyment nly; All payments related t the early terminatin f a cntract must reflect perfrmance ver time and have t be designed in a way that des nt reward failure. Additinal rules t General RZB Grup Cmpensatin Principles based n lcal legislatin: Remuneratin f the members f RIF s Bard f Directrs and Supervisry Bard related t this rle is decided annually by the Sharehlder, tgether with the apprval f the annual reprt. 2.1 Base Pay Base Pay is a nndiscretinary cmpensatin, which des nt vary accrding t cmpany r individual perfrmance r results achieved. Principles applicable t Base Pay Remuneratin practices are based n a unified and cnsistent set f principles and cnsideratins: a) Salary levels f the financial sectr RIF cntinuusly mnitrs the salaries in the financial sectr and determines its wn remuneratin practices accrdingly. With respect t base pay RIF psitins itself n the market median. b) Cmplexity f the jb, its rle and weight within the rganizatin Individual remuneratin is determined in the cntext f the jb grading system applied within RBHU and RIF. The grades indicate the cmplexity f the jbs as well as their rle and weight within RIF and RBHU. Salary bands assigned t the grades ensure cnsistency between pay, jbs and respnsibilities, establish the internal equity f remuneratin and at the same time allw differentiatin in perfrmance and persnal abilities, cmpetencies. c) Individual perfrmance, abilities and cmpetencies f the emplyees Individual salaries are determined in a differentiated manner based n the persnal cntributin, the perfrmance f emplyees, and the individual skills and experience that they bring t the psitin; in ther wrds, in additin t the cmplexity and weight f the given psitin we als take int accunt the effectiveness, and standard f perfrmance and quality in the given psitin when determining salaries. Raiffeisen Investment Fund Management Cmpany Page 6 f 17

7 Salary bands and salaries f RIF s emplyees are reviewed annually, in accrdance with changes in the market. Due t market cnditins, RIF may als emply different salary bands in specific jb families. The fllwing are typical situatins when individual base pay is adjusted: General pay increase (adjusted t the market, but differentiated n the basis f the criteria determined by the pay increase plicy), Pay increase related t prmtin, Discretinary base pay adjustments in rder t supprt retentin. 2.2 Variable Cash Pay Variable Cash Pay is in principle linked t RZB/RBI Grup, RIF, team and/r individual perfrmance r results and may cnsist f shrt term and lng term elements. Principles applicable t Variable Cash Pay The purpse f variable cash pay is t create a tighter crrelatin between the remuneratin f emplyees and the prfitability f the institutin. Variable cash pay is intended t ensure that emplyees are recgnized differently based n their perfrmance, and t prvide an incentive fr imprving perfrmance, while taking reasnable risks and managing csts efficiently. The prcess f paying variable cash pay is supprted by a perfrmance management system that cvers all functinal areas and includes all emplyees. As part f the perfrmance management cycle, annual targets and perfrmance requirements are set at every level f the rganisatin, which are cntinuusly mnitred and are evaluated at the end f the given perid by the direct superirs and decisin-makers. The perfrmance targets include bth quantitative and qualitative gals, and the targets f the asset management areas incrprate business, institutinal and risk gals as well. Variable cash pay is determined n the basis f the target bnus; hwever, the final amunt paid always depends n RZB/RBI grup, RBHU and RIF rganizatinal, team and individual perfrmance. Perfrmance management system RIF has implemented a perfrmance management system which prvide fr that the ttal amunt f remuneratin is based n a cmbinatin f the assessment f the perfrmance f the individual and f the business unit cncerned and f the verall results f the institutin and when assessing individual perfrmance, financial and nn-financial criteria are taken int accunt. Bnus Pl apprach RIF has implemented a Bnus Pl apprach system which includes all kinds f variable payments paid t emplyees f RIF (including Bard Members) The target amunts f annual variable cash pay (target bnus) per emplyee add up t be the ttal Target Bnus Pl. The target amunts f annual variable cash pay (target bnus) per jb categry are as fllws: Jb categry Target bnus* CEO, deputy CEO 40% Fund managers, risk managers, team heads 35% Deputies f the team heads 25% Administrative emplyees, thers 20% * percenatge f annual base pay The level f each business year s Budgeted Bnus Pl is set equal r lwer t the Target Bnus Pl in RIF s Annual Budget which must be apprved r mdified by the Sharehlder accrding t the financial situatin f RZB/RBI Grup and RBHU. In case negative PAT is expected at either RIF r RBHU, the Budgeted Bnus Pl may be reduced t serve as a retentin payment (see als sectin 2.2.2). The Budgeted Bnus Pl can be increased r decreased by the Sharehlder depending n the verall annual perfrmance f RIF t arrive at the Actual (Payable) Bnus Pl. Raiffeisen Investment Fund Management Cmpany Page 7 f 17

8 The measurement f perfrmance used t calculate the Actual Bnus Pl shall include an adjustment fr all types f current and future risks and takes int accunt the cst f the capital and the liquidity required. Psitive adjustment is als applicable whenever the Budgeted Bnus Pl was based n frecast relative t which the financial situatin f the RZB Grup r RBHU imprves. The allcatin f the Actaul Bnus Pl within RIF is decided by RIF s Management and shall als take int accunt all types f current and future risk. RIF uses annual bnus as type f variable cash pay t which all emplyees are eligible, depending n the result f their annual perfrmance appraisal. Head f teams (business lines) make a decisin abut individual staff bnuses n the basis f the bnus pl available fr their units and the results f the individual perfrmance appraisals. The fllwing table prvides guidelines fr the payment f individual bnuses: Individual perfrmance appraisal AAA Cnsistently exceeds expectatins by far AA Exceeds expectatins A Fully meets expectatins B Partially meets expectatins C Belw expectatins individual bnus in mnths % * ABC * target bnus % * ABC * target bnus % * ABC * target bnus 30 70% * ABC * target bnus 0 where ABC is the annual bnus cefficient: Actual Bnus Pl / Target Bnus Pl * team participatin If nly retentin payment is t be paid, the abve calculated values must be lwered prprtinately t the rati f retentin payment pl t the Target Bnus Pl. The individual perfrmance appraisal and the team participatin cefficient are determined by RIF s Management in line with RBHU plicy n the distributin f individual perfrmance appraisal in a way that guarantees the prper use f the Actual Bnus Pl Step-In-Criteria fr payment f variable cmpensatin Variable cmpensatin, including any deferred prtin (see sectin 3.2.3) is allcated, paid r vests nly if the fllwing criteria are met (Step-In-Criteria): This is sustainable accrding t the financial situatin f the RZB/RBI Grup, RBHU and the financial situatin f RIF as a whle, and justified accrding t the perfrmance f RIF, the business unit and the individual cncerned. The minimum requirements as applicable under lcal law fr RIF t disburse dividends and t allcate r pay variable remuneratin are achieved. Furthermre the fllwing criteria are met fr RBI Grup Cmpanies: a net prfit is reached n RBI Grup level the legally required RBI Grup CET 1 rati is achieved RIF has achieved the minimum ecnmic r regulatry capital base required in accrdance with applicable law All additinal criteria and pre-cnditins fr any allcatin and/r payment f variable remuneratin as frm time t time defined by the RZB / RBI Bard r Supervisry Bard (REMCO) are met Prvisins in case f negative PAT If RIF did nt generate a prfit after tax (PAT) in a perfrmance year, variable remuneratin may nly be allcated, paid r vested with respect t this negative perfrmance year n exceptinal basis, prvided: Raiffeisen Investment Fund Management Cmpany Page 8 f 17

9 this is justified based n the Prprtinality Principle, it is in cmpliance with legal & regulatry requirements, the specific business mdel f RIF and/r ther special external r internal circumstances affecting RIF, is taken int cnsideratin and prvided that all f the criteria set ut belw are met and the exemptin is apprved by the REMCO f RIF. Criteria fr allcatin, payment and vesting f variable remuneratin in RIF in case f lsses: a net prfit is reached in RBI Grup the legally required RBI Grup CET 1 rati is achieved This is sustainable accrding t the financial situatin f the RZB/RBI Grup RIF has achieved the minimum ecnmic and regulatry capital base required in accrdance with applicable law The ttal variable remuneratin des nt limit the ability f the RZB/RBI Grup/RBHU t strengthen its capital base. The minimum requirements as applicable under lcal law fr RIF t allcate r pay variable remuneratin are achieved. This is justified accrding t the perfrmance f the emplyees cncerned. 3 Specific Cmpensatin Principles applicable within RIF The Specific Cmpensatin Principles prvided fr in this sectin shall nt apply t all emplyees, but nly t categries f staff including senir management, risk takers, staff engaged in cntrl functins and any emplyee receiving ttal remuneratin that takes them int the same remuneratin bracket as senir management and risk takers and whse prfessinal activities have a material impact n the risk prfile, ( Identified Staff ). All kind f variable remuneratin - including all variable remuneratin described in sectin [2.2] shall nly be allcated and paid in cmpliance with the Specific Cmpensatin Principles. 3.1 Selectin f Identified Staff Categries f staff t be included The fllwing categries f staff shall be included in the Identified Staff selectin: Executive members f RIF s crprate bdies, such as members f the Bard f Directrs RIF s Management respnsible fr day-t-day management. Staff respnsible fr independent cntrl functins such as senir staff psitins with impact n the secure peratin f the institutin by exercising cntrl ver business functin (i.e. HR, Cmpliance, Audit), unless thse functins are delegated and the staff is paid by the Sharehlders. Risk taking / Risk Cntrl functins: fund managers and risk managers Other emplyees/persns whse ttal remuneratin takes them int the same remuneratin bracket as senir managers and risk takers and whse activities have significant impact n the risk prfile f RIF and the investment funds it manages Prprtinality fr categries f staff Principle the Identified Staff may be categrized with respect t the extent f the impact Based n the Prprtinality n the RBI grup/rbhu/rif s risk prfile, by taking int accunt in particular the fllwing criteria: Degree f senirity Size f the bligatin int which the risk taker may enter n behalf f RIF/Funds managed by RIF Size f the grup f persns wh have nly cllectively impact n the risk prfile Rati variable / fixed payment and amunt f variable payment Raiffeisen Investment Fund Management Cmpany Page 9 f 17

10 Quantitative Risk Criteria measuring the level f risk taken by a certain emplyee based n the internal rules set up. (E.g. Ecnmic Capital, Credit Apprval Limits, P&L respnsibilities, etc) Other qualitative criteria reflecting the impact f decisins taken by certain emplyee as their jb descriptins (Key risk functins, decisin makers directly influencing the strategy f a certain business line r even the whle institutin, etc) Based n this assessment tw categries f Identified Staff might be differentiated: Fully Affected Identified Staff including emplyees/jbs having a significant material impact n RIF s risk prfile. Fr this categry all Specific Cmpensatin Principles apply. Identified staff with less material impact n risk prfile f the rganisatin ( Partially Affected Identified Staff ) fr which, based n the Prprtinality Principle, the fllwing Specific Cmpensatin Principles may be neutralized: Variable remuneratin in Equity instruments (see sectin 3.2.2) Retentin (see sectin ) Deferral (see sectin 3.2.3) Ex pst incrpratin f risk fr variable remuneratin (see Malus r Clawback sectin [3.6.1 / 3.6.2]) The categrizatin f Identified Staff as having less impact n risk and the Neutralizatin f the principles described abve with respect t the Partially Affected Identified Staff shuld be prven and dcumented Selectin Prcess Each year RIF has t identify the jbs/emplyees with material impact n the RIF s risk prfile. The selectin prcess f the Identified Staff must ensure fair, cmprehensible and equal treatment f all emplyees and shall respect and cnsider applicable mandatry lcal regulatins. Applying the Prprtinality Principle all jbs/emplyees f RIF shall be assessed and screened. All Bard members f RIF shall be cnsidered as Identified Staff resulting frm the nature f the jb and set up f the jb respnsibilities and are fully gverned by decisin taken by Grup HR & RZB / RBI Bard. The assessment prcess shuld be rlled ut by RIF`s Management in cnjunctin with RBHU s HR and the representatives f delegated functins (e.g. Audit, Cmpliance). The assessment criteria and the prcess shall be duly dcumented, s that in an ex-pst review f e.g. a regulatry authrity the assessment can be meaningfully reprduced. RIF s Management jintly with RBHU s HR and the representatives f delegated functins is t prepare a prpsal fr the Identified Staff-list, reflecting and explaining which staff members shall be regarded as Fully Affected Identified Staff and which as Partially Affected Identified Staff (if any) (as described in sectin 3.1.2) and the applicable pay-ut mdel ( Grup 2, 3 r 8 see sectin 3.3) fr each categry f staff. RIF s Management jintly with RBHU s HR is t design and prepare the dcumentatin material required fr the apprval prcess. The selectin and final prpsal must be pre-apprved by Grup HR, and finally apprved by RIF s REMCO. 3.2 Specific Cmpensatin Principles applicable t Identified Staff Overview Perfrmance assessment The pay-mix (prtin f variable cmpensatin t fixed cmpensatin) is well balanced which shuld allw every emplyee an adequate living based n fixed incme; thus allwing a full flexible variable remuneratin plicy including the pssibility f n variable remuneratin. Where remuneratin is perfrmance related, the ttal amunt f remuneratin is based n a cmbinatin f the assessment f the perfrmance f the individual and f the business unit cncerned and f the verall results f RIF and when assessing individual perfrmance, financial and nn-financial criteria are taken int accunt; The assessment f the perfrmance is set in a multi-year framewrk apprpriate t the lifecycle f the investment funds managed by RIF in rder t ensure that the assessment prcess Raiffeisen Investment Fund Management Cmpany Page 10 f 17

11 is based n lnger-term perfrmance and that the actual payment f perfrmance-based cmpnents f remuneratin is spread ver a perid which takes accunt f the redemptin plicy f the investment funds RIF manages and their investment risks; The measurement f perfrmance used t calculate variable remuneratin cmpnents r pls f variable remuneratin cmpnents includes an adjustment fr all types f current and future risks and takes int accunt the cst f the capital and the liquidity required. The allcatin f the variable remuneratin cmpnents within RIF shall als take int accunt all types f current and future risks Equity Instruments and Retentin A substantial prtin, and in any event at least 50%, f any variable remuneratin shall cnsist f nn-cash instruments (Phantm Shares). The instruments referred t in this pint ( Equity Instruments ) shall be subject t an apprpriate retentin plicy ( Retentin ) designed t align incentives with the lnger-term interests f RIF and the investment funds it manages and the investrs f thse investment funds. This pint shall be applied t bth the prtin f the variable remuneratin cmpnent deferred (as described belw) and the prtin f the variable remuneratin cmpnent nt deferred Deferral, Precnditins fr payment and ex-pst incrpratin f risk A substantial prtin, and in any event at least 40%, f the variable remuneratin cmpnent is deferred ver a perid which is nt less than 3 years ( Deferral ) and is crrectly aligned with the nature f the business, its risks and the activities f the member f staff in questin. Remuneratin payable under Deferral arrangements shall vest n faster than n a pr-rata basis. In the case f a variable remuneratin cmpnent f a particularly high amunt, at least 60% f the amunt shall be deferred. The length f the deferral perid shall be established in accrdance with the business cycle, the nature f the business, its risks and the activities f the member f staff in questin. The variable remuneratin, including the deferred prtin, is paid r vests nly if it is sustainable accrding t the financial situatin f RIF as a whle, and justified accrding t the perfrmance f RIF, the investment funds managed by RIF, the business unit and the individual cncerned. Withut prejudice t the general principles f natinal cntract and labur law, the ttal variable remuneratin shall generally be cnsiderably cntracted where subdued r negative financial perfrmance f the institutin ccurs, taking int accunt bth current remuneratin and reductins in pay-uts f amunts previusly earned, including thrugh malus r clawback arrangements ( Malus r Clawback ) Deviatins frm Specific RZB Grup Cmpensatin Principles based n lcal legislatin In case the length f emplyment f an emplyee categrized as Identified Staff exceeds 3 years, terminatin f emplyment befre expiry f the Deferral r Retentin perid des nt lead t the maturity f the (pr rata) Deferred Instalments r Phantm Shares. The bnus cntinues t be paid ut in accrdance with the bnus principles set in this dcument. Als in this case, the entitlement t a bnus arises nly step-by-step with the payment f the respective partial amunts. If length f emplyment is less than 3 years at the terminatin f emplyment, deferred and retained parts f the variable remuneratin must be paid ut at the date f terminatin, hwever they are subject t the Malus and Clawback regulatins defined in this dcument. 3.3 Bnus Pay-ut Mdels General The bnus pay-ut mdel applied in RIF varies with the staff categry. Staff categries are: Fully Affected Identified Staff (as described in sectin 3.1.2) Partially Affected Identified Staff (as described in sectin 3.1.2) All ther emplyees f RIF The bnus pay-ut mdels fr each staff categry are as fllws: Raiffeisen Investment Fund Management Cmpany Page 11 f 17

12 GROUP Mdel Upfrnt payment% (UP), Deferred payment% (DP), Deferred perid /Num f Years/ (NOY), Cash % Phantm % Retentin Perid (RP) Affected Staff 3 60% 40% 3 50% 50% 1 Fully Affected Identified Staff 8 100% Partially Affected Identified Staff and Nn Identified Staff Variable remuneratin, including the deferred prtin, is paid r vests nly if the Step-in-Criteria are met Bnus Pay-ut Mdel fr Fully Affected Identified Staff Staff affected: Bard members and executives f RIF any ther emplyees receiving ttal remuneratin that takes them int the same remuneratin bracket as senir management and risk takers and whse prfessinal activities have a significant material impact n the risk prfile Pay-ut Mdel: 60% f the bnus amunt is paid immediately (=upfrnt payment) 40% f the bnus amunt is subject t Deferral and be paid ut pr rata ver a perid f min. 3 years In case the awarded actual bnus amunt is higher than 100% f the annual base pay, nly 40% f the bnus amunt is paid immediately and 60% is subject t Deferral and t be paid ut pr rata ver a perid f 3 years. Payment split: 50% in cash and 50% in Equity Instruments (see sectin 3.2.2) One year Retentin perid fr the Equity Instruments (see sectin 3.2.2) Bnus Pay-ut Mdel fr Partially Affected Identified Staff Staff affected: any emplyees receiving ttal remuneratin that takes them int the same remuneratin bracket as senir management and risk takers but whse prfessinal activities have less material impact n the risk prfile Pay-ut Mdel: 100% f the bnus amunt is paid immediately (=upfrnt payment) n Deferral N payment split: 100% in cash 3.4 Equity Instruments Requirement t use Equity Instruments RIF will use Phantm Shares (see sectin 3.4.2) t fulfil the Equity Instrument requirement Phantm Shares T fulfil the bligatin f granting and paying ut variable remuneratin in Equity Instruments, RIF uses the fllwing Phantm Shares : Theretical share price f RIF using a cnstant P/E rati and the 3 year mving average Prfit After Tax (PAT) f RIF. Using a cnstant P/E ensures that the annual perfrmance f the Phantm Share is the percentage change in the current 3 year mving average PAT frm the preceding year s 3 year mving average PAT. At least 50% f the annual awarded bnus is t be paid in frm f Equity Instruments (Phantm Shares). 60% f Phantm Shares are paid ut upfrnt and 40% are subject t Deferral. Therefre, the 50% part ut f the ttal annual awarded bnus payable in frm f Equity instruments (Phantm Shares) is t be split int tw parts (example based n 60% up-frnt payment): Raiffeisen Investment Fund Management Cmpany Page 12 f 17

13 1. 50% (bnus part in Equity instruments)* 60% (up frnt part) = 30% f ttal bnus t be paid in Up frnt Equity Instruments (Phantm Shares) 2. 50% (bnus part in Equity instruments)* 40% (deferred) = 20% f ttal bnus t be paid in Deferred Equity Instruments (Phantm Shares) One year Retentin perid (r a lnger perid accrding t lcal Law see sectin ) applies t bth parts, up-frnt and the deferred part f Phantm Shares, which means that the value f the Phantm Shares can be paid nly after the expiry f ne year after the end f the business year the bnus is awarded fr (fr up-frnt part) and after the expiry f ne year after the end f each (pr rata) perid f Deferral. Fllwing principles are t be nticed: Phantm Shares are based n the Phantm Share price The number f Phantm Shares is calculated dividing the respective bnus amunt by the Phantm Share price f the business year the bnus is awarded fr. This results in number f Phantm Shares crrespnding t the upfrnt and als fr the deferred parts; During the Retentin perid the number f allcated Phantm Shares stays unchanged. After each Retentin perid the respective part f the Phantm Shares is cnverted int cash and paid ut using the Share price f the previus business year. The resulting cash amunt will be the basis fr taxatin at payment date Retentin perid General The legislative guidelines dn t specify the length f the retentin perid, but there is a general presumptin that minimum retentin perid will apply t all Equity Instruments awarded. The retentin perid wuld largely be at the discretin f the cmpany taking int accunt the time hrizn fr risk realizatin. The legislative guidelines have emphasized the difference between deferral and retentin perid which needs t be acknwledged hwever there is n verriding requirement fr the perid f retentin t match any deferral perid being used Retentin Perid f RBI Grup Cnsidering the aspect f prprtinality fr retentin perids f deferred instruments, the fact that in RBI Grup, the maximal length f the deferral perid has been implemented and taking int accunt the time hrizn fr risk realizatin, retentin perid f 1 year is currently cnsidered as sufficient and apprpriate. Therefre Equity Instruments f RIF have t be retained (bth fr upfrnt & deferred bnus part) fr 1 year. During the retentin perid the number f allcated Equity Instruments stays unchanged and nly the price f the Equity Instrument will have an impact n the final cash payment amunt. 3.5 Changes in functins and jbhlders subject t Identified Staff categry during the year In case an emplyee hlds in a perfrmance year a functin fr a perid f 3 mnths r lnger under the Identified Staff categry, the ttal amunt f annual variable payment will be subject t the Specific RZB Grup Cmpensatin Principles. This includes the respective bnus Pay-ut Mdel applicability, as defined in this Plicy (sectin 3.3). Raiffeisen Investment Fund Management Cmpany Page 13 f 17

14 This situatin might ccur in case f (e.g.): the emplyee changing the jb (including transfers frm / t ther NWU s f RBI / RZB Grup f cmpanies); rganizatinal changes; terminatin f the emplyment cntract etc. new hires. Fr internal mvements frm a Fully Affected Identified Staff psitin t a Partially Affected Identified Staff psitin r mvements resulting in a different pay-ut mdel, the final pay-ut f the variable cmpensatin is t be dne n a pr rata basis. 3.6 Ex- pst incrpratin f risk fr variable remuneratin (Malus / Clawback events) Malus A malus event may entail the reductin r frfeiture f utstanding (deferred) bnus payments. In particular, the fllwing events cnstitute a malus event: If a clawback event ccurs (see belw), A natinal regulatr rders a limitatin r stp f variable remuneratins, Evidence f misbehavir r serius errr by the emplyee (e.g. breach f cde f cnduct and ther internal rules, especially thse rules relating t market, liquidity, business and partner risk management), RZB/RBI Grup, RBHU, RIF and/r subsequently the business unit (team) in which the emplyee wrks suffers a significant dwnturn in its financial perfrmance (specific indicatrs may be defined by RZB), RZB/RBI Grup, RBHU, RIF and/r the business unit in which the emplyee wrks suffers a significant failure f risk management, i.e. a risk adjustment f the assessment f the perfrmance must be made because ex-pst risk assessment reveals that the riginal risk assessment was t psitive, Significant changes in RZB/RBI Grup s ecnmic r regulatry capital base Clawback A clawback event entails the lss f all deferred payments and the clawback f all payments made with regard t the bnus. Clawback is applied in case f criminal ffence, misleading infrmatin prvided by emplyee r fraud with high negative impact n the bank s credibility and prfitability. 4 Prhibitin f Persnal Hedging The effectiveness f risk alignment will be significantly weakened if emplyees wuld be able t transfer the dwn side risk t anther party thrugh hedging r certain types f insurances. Therefre the use f any kind f persnal hedging strategies r remuneratin- and liability-related insurance t undermine the risk alignment effects embedded in the remuneratin arrangement are nt allwed and strictly frbidden. 5 Gvernance 5.1 General Crprate Directive and Identified Staff selectin Besides the prvisins f the Law, this Remuneratin Plicy duly implements the prvisins f the Grup Directive and has been apprved by the Supervisry Bard f RIF. Raiffeisen Investment Fund Management Cmpany Page 14 f 17

15 The selectin f Identified Staff in cmpliance with the Remuneratin Plicy shall be cnducted annually. The result f the assessment prcess (including the list f Identified staff members and applicable pay-ut mdel - see sectin 3.3.) shall be apprved by the REMCO f RIF. RIF shall prvide Grup HR with infrmatin n the result f the Identified Staff selectin in due time befre apprval by the REMCO f RIF. The implementatin f this Remuneratin Plicy and the selectin f Identified Staff is, at least annually, subject t central and independent internal review cnducted by RIF (and mnitred by RZB /RBI frm a grup perspective) with respect t cmpliance with this Remuneratin Plicy and the Grup Directive. RIF shall prvide such infrmatin with respect t implementatin f the Grup Directive and this Remuneratin Plicy as requested by Grup HR at any time. 5.2 Decisin making bdies Supervisry Bard f RIF Apprves and annually reviews the general remuneratin principles f RIF (this Remuneratin Plicy) based n the Law and the Grup Directive and is respnsible fr implementatin REMCO f RIF Respnsible fr the preparatin f decisins regarding remuneratin, including thse which have implicatins fr the risk and risk management f RIF r the investment funds managed by RIF and which are t be taken by the Supervisry Bard f RIF Apprves all significant changes t the existing and all new incentive schemes based n the RZB Grup principles and lcal market practice Makes final decisin n selectin f, special cmpensatin principles and variable cmpensatin payable fr Identified Staff f RIF in cmpliance with this Remuneratin Plicy Apprves the findings f the annual malus / clawback assessment fr Identified Staff Directly versees the remuneratin f the senir fficers respnsible fr risk management and cmpliance functins. The REMCO f RIF shall be cnstituted in a way that enables it t exercise cmpetent and independent judgment n remuneratin plicies and practices and the incentives created fr managing risk. RIF s management Prepare the prpsal fr the Identified Staff-list, reflecting and explaining which staff members shall be regarded as Fully Affected Identified Staff and which as Partially Affected Identified Staff Implement the cmpensatin system Budget and calculate the bnus pl (if any) in strng cperatin with lcal HR; 5.3 Lcal Supprt and cntrl functins Lcal Cmpliance screens the Remuneratin Plicy f RIF in rder t be cmpliant with statutry and internal regulatins and can give significant input int the setting f remuneratin awards where they have cncerns regarding: The impact n staff behavir, and The riskiness f the business undertaken. Lcal Human Resurces is respnsible fr: Supprt RIF s Management in preparing the prpsal fr the Identified Staff-list Design, dcument and mnitr the implementatin f the cmpensatin system (e.g. cst cntrl, principles, prcesses cncerning cmpensatin, design, review etc.) Review the cmpensatin structure n regular basis and clsely invlve and submit all relevant infrmatin t the internal cntrl functins (i.e. internal audit, risk management, cmpliance functins, etc.) Raiffeisen Investment Fund Management Cmpany Page 15 f 17

16 With invlvement frm all necessary stakehlders write lcal Directives, peridically review the Renumeratin Plicy f RIF, recmmend mdificatins t the Plicy and submit applicatins and cllect all decisins cncerning lcal reward systems Lcal Legal reviews the Remuneratin Plicy f RIF and makes prpsals fr adjustment t ensure cmpliance with lcal and Eurpean legal requirements; Lcal Internal Audit shall audit the executin f the remuneratin plicy n an annual basis. Lcal Risk Cntrlling is invlved n an as needed basis. 5.4 Supprt and cntrl functins f RZB / RBI Grup Grup HR Reviews, makes prpsals fr adjustments t ensure cmpliance with applicable grup standards in regard t Ttal Rewards Management and finally pre-apprves the Remuneratin Plicy befre the final apprval f the REMCO f RIF; Checks the final list f RIF s Identified Staff and its cmpliance with Grup standards regarding the Identified Staff assessment prcess; Advises RIF s HR in matters cncerning Ttal Rewards Management ; Pre-apprves all incentives schemes implemented in RIF; Apprves final grades fr B-1 and B-2 psitins within RIF; Crdinates the apprval f individual bnus pl n RIF s level; Crdinates all grup reprting (EBA, FMA, OeNB) Implements all regulatry requirements cncerning cmpensatin; Grup Cmpliance Analyzes hw the variable remuneratin practices / structure / mdels affect the RZB / RBI Grup adherence t Cmpliance rules and regulatry requirements; Reviews the Grup Directive and Lcal Crprate Directives and makes prpsals fr adjustment t ensure alignment with cmpliance related prvisins and prvides input t the respective dcuments as required fr pre-apprval by Grup HR Grup Legal Reviews the Grup Directive and lcal Crprate Directives f NWUs and makes prpsals fr adjustment t ensure cmpliance with legal requirements and prvides input t the respective dcuments as required fr pre-apprval by Grup HR; Grup Risk Cntrlling invlvement as necessary 6 Reprting Intrductin and changes f lcal cmpensatin practices, including underlying prcesses and methds, need t be pre discussed with and reprted t Grup HR. RIF s HR infrms the internal cntrl functins (i.e. internal audit, risk management, cmpliance functins, etc.). 7 Disclsure RIF shall disclse t the regulatry authrity such infrmatin regarding its remuneratin plicy and practices with respect t Identified Staff as prvided fr by mandatry law. RIF shall publish its remuneratin plicy bth internally and externally via its hmepage / intranet site, t be accessible fr anyne interested. RIF shall reprt the fllwing infrmatin in the semi-annual and annual reprts f its managed funds: the ttal remuneratin f the entire staff f RIF, a breakdwn accrding t fixed and variable payment shall als be included Raiffeisen Investment Fund Management Cmpany Page 16 f 17

17 the number f beneficiaries the prprtin f the ttal remuneratin f the staff f RIF attributable t the investment fund the ttal remuneratin breakdwned accrding t the executives (senir management) f RIF and the emplyees whse prfessinal activities have material impact n the risk prfile f the investment fund 8 Dcument Histry Date f Apprval 07/22/2014 Date f Release 07/22/2014 Supplementary dcuments - Raiffeisen Investment Fund Management Cmpany Page 17 f 17