38. Share-based payments

The Bank has a Policy on remuneration for employees that exert a considerable influence on the risk profile of BNP Paribas Bank Polska S.A.

The principles and assumptions underlying the aforesaid Policy guarantee the existence of a reasonable, balanced and controllable remuneration policy, consistent with the acceptable risk level, the standards and values of BNP Paribas Bank Polska

S.A. and the applicable laws and regulations, in particular the Ordinance of the Minister of Development and Finance of 6 March 2017 on the risk management system and internal control system, remuneration policy and detailed method of estimating internal capital in banks and recommendations provided for in CRD4.

Variable remuneration granted to the Bank’s employees that exert a considerable influence on the risk profile is divided into two portions, namely a financial instrument (phantom shares) and cash. Both these portions of remuneration are deferred for three years if the total amount of variable remuneration is higher than PLN 150 thousand.

Variable remuneration in the form of phantom shares is paid as a cash equivalent of the number of shares granted to the employee, following the expiry of the retention period.

The cash portion of variable remuneration is subject to IAS 19 and the one granted in phantom shares to IFRS 2.

XLS

	2019		2018
	Financial instrument		Financial instrument
	number	value (PLN ‘000)	number	value (PLN ‘000)
Opening balance	182,913	10,684	85,342	6,285
granted in current period	170,853	8,440	36,943	2,389
Granted as part of merger with Raiffeisen Bank Polska	–	–	107,328	5,045
exercised in current period	(59,028)	(3,496)	(46,700)	(3,035)
Closing balance	294,738	15,628	182,913	10,684

In 2019 payments of PLN 3.496 million were made due to exercising rights to deferred phantom shares (under the program for 2015 and 2016).

The table below presents the terms of the Stock Purchase Plan for 2019

XLS

Transaction type in line with IFRS 2	Share-based payments settled in cash
Plan issued on	21 June 2012 – the Resolution of the Supervisory Board approving the Remuneration Policy
The first day of granting phantom shares	13 March 2019
The last day of granting phantom shares	20 March 2019
Plan settlement	On the settlement day of the deferred remuneration for 2015-2016, each participant will receive cash in the amount calculated as the product of the number of phantom shares and the median price of shares in BNP Paribas Bank Polska S.A. at the end of each working day (i.e. closing rate) from the year preceding the year of unit realization (January – December). On the day of settling the deferred remuneration for 2017, the participant will be paid the amount of cash being the product of the phantom shares held by the participant and the weighted average volume of the Bank’s share prices of each business day from the End Period, whose length is 40 business days from July 1, 2018. The conversion of variable remuneration for 2017 into phantom shares was calculated based on the arithmetic mean of the volume- weighted average price of the Bank’s shares each business day of the Initial Period, the length of which is 25 business days from 8 Febuary 2019.
Median price of BNP Paribas Bank Polska S.A. shares, for converting deferred phantom shares for 2015-2016 into cash	PLN 60.00
Weighted average price of BNP Paribas Bank Polska S.A. shares to convert deferred phantom shares from 2017 into cash	PLN 53.73
Weighted average price of BNP Paribas Bank Polska S.A. shares to convert variable remuneration into phantom shares	PLN 50.49

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Annual report 2019

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38. Share-based payments

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