8. Incentive Systems

The company discloses how target agreements and remuneration schemes for executives and employees are also geared towards the achievement of sustainability goals and how they are aligned with long-term value creation. It discloses the extent to which the achievement of these goals forms part of the evaluation of the top managerial level (board/managing directors) conducted by the monitoring body (supervisory board/advisory board).

OLB’s remuneration systems are designed to support both the recruitment as well as the long-term retention of qualified employees and the achievement of a value-oriented and sustainable success of the company by taking into account essential regulatory requirements.
Incentives considering sustainability aspects are provided, in particular, by including relevant objectives and key performance indicators (KPI) in the target agreements concluded with members of the Board of Directors, officers and employees.
Target agreements of Board members not only contain business objectives, but also different sustainability aspects. This includes, in particular, the requirement to promote a uniform, performance-oriented company culture and to comply with the regulatory conditions. Ecological or social objectives are not explicitly agreed upon by the Bank at the present time. A high degree of sustainable incentives arises for Board members from the fact that the entire variable remuneration is subject to an assessment basis spanning several years. This counteracts the effects of short-time incentives and the strive for a short-time success. That is additionally supported by the fact that the Bank withholds parts of the variable remuneration pursuant to the requirements applicable to risk carriers working in important institutions, and only pays it out in batches after another review of the achievement of the underlying objectives.
OLB’s Supervisory Board is responsible for an adequate design of the remuneration system for the individual members of the Board of Directors. It not only means that it specifies the targets that will underly the target agreements concluded with Board members, but also the decision whether the targets agreed upon in the previous year have been achieved and the resulting decision about the achievement of the targets over several years. The Supervisory Board is also responsible for reviewing again whether the underlying objectives have been met, which is necessary before any of the retained batches will be paid out.
Sustainability objectives are also reflected in the target agreements concluded with officers and employees, however, the Bank does currently not explicitly agree on ecological or social targets. Sustainability targets are, for example, factors such as client satisfaction, implementation / compliance with legal requirements and conformity with OLB’s Compliance culture which will each be assessed when a decision is made on whether the targets in the past financial year have been achieved or not. This is reviewed by the Bank. Some of the employees are also risk carriers. The Bank withholds a part of their variable remuneration before it is paid out to review whether they achieved their underlying targets. Such a review is made by the Bank.