Capitals:
Remuneration for Members of the Management Board at PKN ORLEN is determined by the Supervisory Board taking into account the relevant resolution of the General Meeting, in connection with the Act on Rules of Remunerating Persons Managing Certain Companies (the Salary Cap Act) and recommendations of its Nomination and Remuneration Committee.
The main components of the Management Board Members’ remuneration system include:
All components of the remuneration are governed by a contract between a Member of the Management Board and the Company.
Additional benefits for directors reporting to the PKN ORLEN Management Board may include, in particular, a company car, variable universal life insurance, additional medical cover for the director and their closest family, including the right to preventive healthcare, sports programmes and rehabilitation, partial coverage of rented accommodation costs, coverage of relocation costs if the relocation takes place during the director’s employment, benefits defined in the Rules of Participation in the Company Social Benefits Fund, the right to participate in the Employee Pension Plan on the terms applicable at the Company, and the right to participate in the Employee Capital Plan subject to generally applicable laws.
The remuneration policy in place at PKN ORLEN supports the achievement of the Company’s goals, including in particular a long-term increase of its shareholder value and stability of operations.
Members of the Management Board of PKN ORLEN are entitled to variable remuneration on the terms set out in their respective contracts, which include, as an appendix, the Rules of the Incentive Scheme for the Management Board.
The amount of variable remuneration depends on the performance against individual targets (both qualitative and quantitative), set by the Supervisory Board for individual Members of the Management Board.
Based on the general set of Management Objectives established by the PKN ORLEN General Meeting, the Supervisory Board sets from four to ten individual bonus targets per year, which are recorded in a Member’s MBO Sheet.
The Supervisory Board may also set a separate objective or objectives for a particular year, which must be met as a precondition to earn variable remuneration for that year.
Assessment of a Management Board Member’s performance against individual bonus targets (both quantitative and qualitative) and achievement of separate objectives is made on an annual basis by the Supervisory Board, on the President of the Management Board’s recommendation which contains an assessment of individually performed bonus targets for all Members of the Management Board, the Management Board’s recommendation regarding achievement of the separate objective/objectives, reports on the performance against individual bonus targets by Members of the Management Board, PKN ORLEN’s financial statements and other documents which the Supervisory Board considers appropriate to examine.
The Supervisory Board passes a resolution to grant a Management Board Member variable remuneration for a given financial year, specifying its amount, or a resolution not to grant the variable remuneration. Such resolution is the basis for payment of the variable remuneration provided that the Company’s consolidated financial statements for the financial year have been approved by the General Meeting and provided that the Management Board Member has been granted discharge in respect of his duties.
The Supervisory Board set the following seven quantitative targets for all Members of the Management Board for 2021:
One of the quality objectives assigned to the Management Board Members included the following sustainability goal: “Implementing solutions to ensure compliance with sustainability and ESG standards, including the sustainable growth initiatives envisaged in the ORLEN 2030 strategy, and securing ESG financing.”
Additionally, in accordance with the resolutions of the PKN ORLEN General Meeting, the Supervisory Board set the following separate objectives, which must be met as a precondition to qualify for variable remuneration for 2021:
The regulations on bonuses applicable to the PKN ORLEN Management Board, directors reporting directly to the Management Board, and other key positions within the Group have certain common features. Persons covered by these schemes are remunerated for their performance against individual targets set at the beginning of a bonus period by the Supervisory Board for the Management Board Members and by the Management Board for key executive personnel. The bonus systems are consistent with the Company’s Values, promote cooperation between particular employees, and motivate them to achieve the best possible results for the ORLEN Group. The targets are both qualitative and quantitative, and their achievement is assessed after the end of the year for which they were assigned.
In accordance with the contracts, Members of PKN ORLEN’s Management Board are required to refrain from any activities that are in competition with the Company’s business for a period of six months after the contract termination. During that period, they are entitled to receive compensation equal to six times their monthly fixed remuneration, payable in six equal monthly instalments. Provisions of the contracts regarding non-competition after termination as a Management Board Member come into force only after a Management Board Member has held their position for at least three months.
In addition, the contracts provide for a severance payment in the case of termination by the Company for reasons other than a breach of primary, essential obligations under the contract, provided that the position of Management Board Member is held for a period of at least 12 months. Such severance benefit amounts to three times the monthly fixed remuneration.
In accordance with the contracts, Members of the Management Boards of ORLEN Group companies are typically required to refrain from any activities that are in competition with the respective company’s business for a period of six months after the contract termination. During that period, they are entitled to receive a compensation equal to 50% or 100% of six times their monthly base pay, payable in six equal monthly instalments.
The non-compete clauses come into force only after a Management Board Member had held their position for at least three or six months.
Severance payments for Members of the Management Boards of ORLEN Group companies are typically governed by the same rules as those applicable to Members of the PKN ORLEN Management Board.
Directors reporting directly to the PKN ORLEN Management Board are, as a general rule, bound by non-compete clauses for a period of six months after the contract termination. During this period they receive a salary equal to 50% of six-month base pay, payable in six equal monthly instalments. The severance pay for termination of contract by the Company is typically equal to six-fold monthly base pay.
For more information on the terms of remuneration, conditions for granting annual bonuses, and non-competition agreements, see section `Remuneration policy`.
| Item | 2021 | 2020 |
|---|---|---|
| Daniel Obajtek | 1,311 | 1,286 |
| Armen Artwich | 1,022 | 969 |
| Adam Burak1 | 1,045 | 885 |
| Patrycja Klarecka | 1,045 | 993 |
| Zbigniew Leszczyński | 1,031 | 985 |
| Michał Róg | 1,083 | 1,010 |
| Jan Szewczak1 | 1,023 | 881 |
| Józef Węgrecki | 1,071 | 1,003 |
| Total: | 8,631 | 8,012 |
| Item | 2021 | 2020 |
|---|---|---|
| Daniel Obajtek | 1 018 | 966 |
| Armen Artwich | 1 018 | 966 |
| Adam Burak1 | 1 018 | 877 |
| Patrycja Klarecka | 1 018 | 966 |
| Zbigniew Leszczyński | 1 018 | 966 |
| Michał Róg | 1 018 | 966 |
| Jan Szewczak1 | 1 018 | 877 |
| Józef Węgrecki | 1 018 | 966 |
| Total: | 8 144 | 7 550 |
| Item | 2021 | 2020 |
|---|---|---|
| Wiesław Protasewicz* | – | 457 |
| Total: | – | 457 |
In 2021 and 2020, Members of the PKN ORLEN Management Board did not receive remuneration for holding positions on the governing bodies of the Company’s subsidiaries within the group of companies as defined in Art. 4.14 of the Act on Competition and Consumers Protection of February 16th 2007.
| Item | 2021 | 2020 |
|---|---|---|
| Wojciech Jasiński1 | 149 | 116 |
| Izabela Felczak-Poturnicka2 | – | 6 |
| Barbara Jarzembowska | 136 | 129 |
| Dominik Kaczmarski3 | 57 | 106 |
| Andrzej Kapała | 136 | 129 |
| Michał Klimaszewski | 136 | 129 |
| Roman Kusz | 136 | 129 |
| Jadwiga Lesisz | 136 | 129 |
| Małgorzata Niezgoda4 | – | 23 |
| Anna Sakowicz-Kacz | 136 | 129 |
| Andrzej Szumański | 136 | 129 |
| Anna Wójcik | 136 | 129 |
| Total: | 1,294 | 1,283 |
| Item | 2021 | 2020 |
|---|---|---|
| Remuneration and other benefits of key management personnel: | ||
| other key management personnel at the Company | 33,103 | 30,616 |
| key management personnel at ORLEN Group subsidiaries | 304,303 | 252,762 |
| Total: | 337,406 | 283,378 |
The higher cost of remuneration of key management personnel is attributable mainly to the acquisition of the Energa Group and the Ruch Group in 2020 and the acquisition of the Polska Press Group and ORLEN Transport in 2021, as well as the effect of changes in the organisational structures which caused an increase in the number of managers reporting directly to members of the Management Board.
