APPROPRIATE DISCRETION
• In accordance with the applicable plans, the HR Committee may exercise considered and informed discretion to adjust STIP and LTIP awards. • While STIP and LTIP awards are based principally on a formula, the HR Committee has established a set of adjustment principles in assessing performance and payout levels to: - not reward or penalize management for infrequent and unexpected events that are not within management’s control; - ensure incentives remain aligned with CWB’s risk appetite, long-term business strategy, and shareholders’ best interests ; - provide flexibility to deal with unexpected events so that appropriately challenging targets can be set, rather than conservative targets that provide allowances for unexpected events; - help ensure that similar fact patterns are handled consistently; and - ensure awards are appropriate, taking into account CWB’s performance viewed holistically. • The HR Committee has the discretion to increase a STIP award for NEOs by an amount not exceeding 50% of the award at target, or to reduce a STIP award to zero. • Discretion is exercised infrequently, in accordance with established adjustment principles, and only when necessary to recognize exceptional circumstances.
COMPENSATION MIX TARGETS
• Components of each executive's overall compensation vary with the position, based on the position’s ability to impact CWB's s uccess. • In line with our pay-for-performance approach, a significant portion of each executive's compensation is “ at risk ” and/or linked to CWB ’s share price to ensure that compensation outcomes will align with performance, thereby motivating executives and aligning their interests with the creation of long-term shareholder value, while supporting executive retention. • Generally speaking, the more senior the position, the greater the executive's total compensation is “ at risk ” and deferred over time. • The following charts illustrate the relative proportions of salary, target STIP, target LTIP and “at risk” compensation for N EOs in 2022 (rounded) . “At risk” compensation means the portion of each executive’s total compensation that will be affected by CWB’s share price performance and /or the achievement of stated performance objectives.
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