Fiscal 2022 STIP Award
Details of the metrics related to CWB’s financial and operational performance and their relative weightings for the 202 2 STIP awards are set out below.
Against ongoing challenges in a volatile operating environment, CWB’s performance on the 2022 STIP financial and operating performance goals came in at 71.5% of target (or 50.1% out of the 70% weighting allocated to financial and operational performance). While our client satisfaction metric resulted in below target performance, our Voice of the Client Research Program indicates that we have maintained a very strong NPS for business and personal clients, and in an 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 at 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 in a difficult environment.
NEO 2022 STIP Quantitative Metrics Target
Component Weight with Performance at Target
2022 Quantitative Performance
Measure
Adjusted EPS (1)
$3.77
30%
$3.72
Adjusted r eturn on common shareholders’ equity (1)
10.9%
10%
11.1%
Efficiency Ratio (1)
50.4%
10%
51.5%
Employee engagement (2)
Maintain
10%
Above target
Client satisfaction (3)
Maintain
10%
Below target
Total and Resulting Award
70%
71.5% of target
(1) Non-GAAP measure. See page 39 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 2022 MD&A. (2) Employee engagement is measured based on the Great Places to Work TM Trust Index.
(3) Client satisfaction is based on our Net Promoter Score (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.
3. LONG-TERM INCENTIVE
Long-Term Incentive Program (LTIP)
Purpose
• The LTIP is designed to attract, motivate, reward and retain employees by aligning our leaders’ interests to create medium- and long-term shareholder value, build a successful and sustainable business, and execute on our strategic direction. • The LTIP consists of awards under the SIP, the RSU Plan and the PSU Plan, each of which is discussed in greater detail below. • Amendments to any of the Plans must be approved by the HR Committee. • Each December, the HR Committee determines the annual aggregate value of LTIP awards for all Participants, including the total value of individual grants to be awarded to the NEOs for that fiscal year (i.e., in December 2021, grants were awarded for the 2022 fiscal year). • In determining grants under the LTIP, grants are generally set at “target” levels with potential adjustments to th ese target values made on a case- by-case basis by the HR Committee, in its judgment, to address performance considerations or other exceptional circumstances. • Grants are not influenced by previous grants made to an executive. • The payout values of all stock options, RSUs, and PSUs are based on share price performance, aligning management and shareholder interests. • In addition, payout values for PSUs are based on achievement of performance against financial and strategic objectives established at the date of each grant. • The LTIP grant target values for the NEOs for fiscal 2022, together with the grant allocation between PSUs (75% of total LTIP) and stock options (25% of total LTIP), follow:
Form of Award
Grant Determination
Payouts
LTIP Allocation (1) PSUs
LTIP Value Target
Stock Options
145% of Base Salary (2)
President and CEO
108.75%
36.25%
All other NEOs 25% (1) As of fiscal 2021, RSUs were generally no longer granted as part of total executive compensation, except for special recruitment/retention purposes. (2) The fiscal 2023 LTIP target the for President and CEO will increase to 170% of base salary. 100% of Base Salary 75%
Share Incentive Plan (SIP)
Overview
Plan Category
The SIP is an equity compensation plan approved by shareholders.
Eligibility
Officers (a CEO, Chief Operating Officer, CFO, president, an executive vice president, a vice president, an assistant vice president, a treasurer, or an assistant treasurer, or any individual who performs a similar function) and employees of CWB Financial Group are eligible for grants under the SIP. The SIP does not limit insider participation. A maximum of 16,932,000 common shares may be issued under the SIP, subject to adjustment for a stock dividend, split, consolidation, or other change to the structure of CWB’s common shares. The SIP does not provide for a maximum number of common shares which may be issued to a Participant pursuant to the SIP (expressed as a percentage or otherwise).
All figures current to October 31, 2022
Plan Maximum
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