What is the remuneration of banks?

Bank remuneration concerns the policy of a financial institution concerning employee compensation, including wages and bonuses. Compensation policies may vary between banks and usually focus on cash and stock bonuses paid to high -level managers. Employee incentives are usually tied to the financial performance of the entire institution or its specific departments and divisions. Policy of remuneration of banks can reflect the amount of risk that the institution is willing to achieve with its own profits and liquid assets. They can be structured in a way that rewards certain managers for the annual performance of their department or region. Bonus incentives can also be paid as a flat payment regardless of the market performance of the financial institution. While bonuses are usually paid in cash, some are given in the form of stock or stock options. Incentives may be paid annually, quarterly or monthly. Management Company management or upper level management decides which employees will receive a bonus and how much will bonus. For example, sales manager may be entitled to a cash bonus worth 15 percent of its salary at the end of each quarter if its department meets its quota.

Another popular type of employee advantage that makes bank remuneration policy is stock payments. Rather than giving managers a gross cash payment, the bank provides employees with a certain number of shares or the right to sell several shares at a certain price. Shares of shares and options are entitled to the managers and managers of the Bank's future financial assets and may damage the market performance of the bank if the stocks are sold in large quantities simultaneously.

Bonuses and incentives increase the overall compensation and rewards of the employee. Apolitics, which assumes that a greater financial risk will usually pay management bonuses regardless of the bank's market performance. This type of policy can lead to future financial problems, especially if the bank is overle work wrong. Common shareholders can worry about the bank's fiscal policies and sell their shares if they expect collapse.

Some banks publish their remuneration policy in the annual report or financial statements. This report describes in detail the amount of bonuses provided to employees and attempts to explain why they were given. Politics that are more conservative in nature usually reduce, reduce or temporarily terminate bonuses for employees if the market performance is weak. Depending on the country in which the bank operates, open reward policy may be required or encouraged.