Fiscal 2023 STIP Award
Details of the metrics related to CWB’s financial and operational performance and their relative weightings for the fiscal 2023 STIP awards are set out below.
The goals for fiscal 2023 STIP financial and operating performance were set at the start of the fiscal year, aligned to CWB’s operating and financ ial budget with the assumption of relatively stable economic conditions. Against an external environment that was more challenging and volatile than anticipated, CWB’s performance on the 2023 STIP financial and operating performance goals came in at 66.5% of target (or 46.5% out of the 70% weighting allocated to financial and operational performance). While our client satisfaction and employee engagement metrics resulted in below target performance, our Voice of the Client Research Program indicates that we have maintained a very strong Net Promoter Score (NPS) for business and personal clients, and in a challenging operating environment in which the industry has witnessed sharp decreases in NPS, we have experienced less severe downward movement on our NPS relative to our Largest Canadian Banks peer group, with our performance above the peer group average. The HR Committee considered whether it was appropriate to make adjustments to the calculated result of the STIP quantitative metrics and determined that no adjustments were required. The qualitative component for individual NEO performance was generally awarded at or above target, reflecting strong strategic progress and relative performance compared with peers in a difficult environment.
NEO 2023 STIP Quantitative Metrics Target
Component Weight with Performance at Target
2023 Quantitative Performance
Measure
Adjusted EPS (1)
$3.73
30%
$3.67
Adjusted r eturn on common shareholders’ equity (1)
10.9%
10%
10.6%
Efficiency Ratio (1)
49.8%
10%
52.6%
Employee engagement (2)
Maintain
10%
Below Target
Client satisfaction (3)
Maintain
10%
Below Target
Total and Resulting Award
70%
66.5% of target
(1) Non-GAAP measure. See page 37 of this Circular for more details. Disclosure of adjusted measures and other non-GAAP measures can be found on in the Non-GAAP Measures section of our 2023 MD&A. As further described on page 38, adjusted EPS and adjusted return on common shareholders’ equity are assessed with the performing loan provision for credit losses removed . (2) Employee engagement is measured based on the Great Places to Work TM Trust Index. (3) Client satisfaction is based on our NPS. NPS measures customer loyalty by asking how likely a customer would be to recommend the company. NPS is calculated as the total percentage of survey respondents who report a strong likelihood that they would recommend the company or its products to others (advocates), minus the percentage of respondents reporting that they are unlikely to recommend the company or its products to others (detractors). We engage a third party to survey customers and calculate our NPS.
Changes to Fiscal 2024 STIP Award
The HR Committee has approved changes to the STIP design for fiscal 2024. The new design will make the determination of NEO STIP outcomes more a function of overall corporate performance, with more modest differentiation by individual executive. It will also introduce a formal risk review step in the evaluation of corporate performance. Corporate STIP performance indicators will continue to emphasize financial performance with “target” financial performance goals contai ning significant stretch, as well as strategic and operational performance goals. The HR Committee will retain the ability to apply informed business judgment over final performance evaluations and pay outcomes. In particular, the HR Committee will examine performance outcomes, by indicator, that differ materially from goals at “target” to align performance and payout outcomes with overall corporate performance and CWB’s risk appetite . The HR Committee may reduce a STIP award to zero if it determines that this is warranted.
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