This policy determines the remuneration system for the Board of Directors and key executives being under the scope of the definition of persons discharging managerial responsibilities under Capital Markets Board regulations.
A fixed remuneration is determined for all members of the Board at the annual general meeting of the Company each year.
Additional payment is made to the executive members of the Board in accordance with the policy established for the top executives.
Additional payment is made to the Board members who have been assigned specific duties to support the activities of the Company of which amount is to be determined by the Board of Directors in consultation with the Nomination and Remuneration Committee.
To the chairman and members of the Executive Committee of the Board which supports the Board for the proper management of the Company in all respects, additional compensation determined by the Board of Directors in consultation with the Nomination and Remuneration Committee by taking into account such Committee Members’ contributions, attendance at the meetings, functions, etc. can be granted. Payments made thereof to the Executive Committee members within the year are to be deducted from the amount determined at the end of the year.
In respect of remuneration of the independent members of the Board of Directors, a payment plan based on the performance of the Company may not be used.
Pro rata payment is made to the members of the Board of Directors by taking into account the time they carried out their duty between the date of appointment and the date of resignation. Expenses incurred by the members of the Board of Directors on account of making contributions to the company (such as transportation, telephone, insurance, etc.) can be paid by the Company.
The remuneration of Top Executives is to consist of two components which are fixed and performance based.
Fixed salaries of Top Executives are determined in accordance with international standards and legal obligations by taking into account the macroeconomic data in the market, the salary policies prevailing in the market, the size and long term targets of the Company and the positions of the persons.
Bonuses for the Top Executives are calculated according to the bonus base, the performance of the Company and the individual performance. A summary of the criteria is as follows:
Bonus Base: Bonus Bases are updated at the beginning of each year. They vary depending on the work volume of the positions of the executives. When updating the bonus bases, top management bonus policies in the market are taken into account.
Performance of the Company: Performance of the Company is determined at the end of the year by measuring the financial and operational targets (market share, exports, overseas operations, productivity, etc.) assigned to the Company at the beginning of each year. In determination of the targets of the Company, that the success be sustainable and that it incorporates improvements over the previous years are the principles taken into account.
Individual Performance: In the determination of the individual performance, along with the targets of the company, the targets related with the employee, customer, process, technology and long term strategy are taken into account. In the measurement of the individual performance, in line with the performance of the company, the principle of achieving long term sustainable improvement in areas apart from the financial areas is observed.
Severance payments may be granted to the key executives by taking into account total term of service, term of service as an executive, contributions to the company, recent bonus base, salaries and bonuses paid in last year of the service.
Total amounts determined by the above principles and paid to the members of the Board of Directors during the year are submitted to the approval of the shareholders at the next general meeting.
Total bonus provided to Board of Directors and Executive Management of Koç Holding amounted to TL 93.5 million in 2013.