Talent Retention and Diverse Welfare : Taiwan Business Bank

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Sustainability

Society

Talent Retention and Diverse Welfare

The Bank’s Remuneration Policy Employee Salary and Benefits Employee Welfare Measures Retirement Life Assurance

The Bank’s Remuneration Policy

In order to attract and retain outstanding financial talents, and to share with employees the operational results of the Bank, the Bank has stipulated in the Article of Association of the Bank that, shall there be profits of the year and except for retaining the remuneration amount for losses from previous years, the Bank shall allocate 1% to 6% as employee's remuneration. For the year of 2022, the remuneration paid to employees was NT$451,457 thousand.

In addition, the Bank's Remuneration Policy integrates the operational performance of individuals, units and the entire bank, and establishes the "Directions for Salary Payment to Employees", "Directions for Payment of New Year, Festival, and Performance Bonuses" and "Directions for Payment of Employee's Compensation" to provide a reasonable and competitive compensation system. The bonuses are linked to the Bank's pre-tax net profit margin, financial indicators of operating performance and individual assessment results, and are based on the year-end assessment results of the Bank's employees.

To enhance business performance and implement objectives management, the Bank has established performance management assessments for all departments and employees, regularly reviewing the multi-dimensional performance outcomes of various units within the Bank. In addition, managers at all levels utilize employee performance assessment and guidance mechanisms to comprehensively evaluate employees' work attitude, competency, and the execution of annual performance goals at the end of each year, ensuring alignment between employees and company objectives.

Remuneration of the Senior Management

Remuneration of the senior management includes salary, management allowance, reward, meal allowance, and pension. The pay structure is made up by fixed remuneration and variable remuneration. Evaluation of personal performance of the senior management combines corporate governance and sustainable development. Factors such as overall business performance, financial indicators, internal control assessment, green finance promotion results, and ESG implementation results are included in the scope of evaluation, which can effectively create a link to variable pay for the senior management.

Regarding the remuneration of Directors of the Bank, the Article of Association has provided that, shall there be profits of the year and except for retaining the compensation amount for losses from previous years, the Bank shall allocate no more than 0.6% as the remuneration of Directors. The Shareholders' Meeting authorized the Board to determine the payment for such remuneration according to the standards in the industry, the respective performance of Directors, the performance of corporate operations, and the results of the performance assessment by the Board. Relevant performance assessment was proposed at the meeting of the Remuneration Committee for discussion and was submitted to and approved by the Board meeting. Regarding the remuneration for Independent Directors, the Board shall determine a reasonable remuneration different from that of the general directors according to the relevant standards within the industry. Except for the monthly fixed remunerations payment, such directors shall not receive the director remuneration specified in the Article of Association. Shall there be losses incurred to the Bank resulting from dubious acts of the Directors, the Audit Committee shall exert control and supervision on the existing and potential risks, and impose necessary punishment according to relevant laws and regulations.

The approval procedures for the remuneration of President, Executive Vice Presidents, Chief Auditor, and members of management shall be based on relevant requirements of “Directions for Salary Payment to Employees,” “Directions for Payment of New Year, Festival, and Performance Bonuses” “Directions for Payment of Employee’s Compensation,” and “Remuneration Committee Organizational Procedures.” Such remuneration shall be implemented and paid after an assessment of performance based on the “Directions for Employee Audit,” “Directions for Performance Audit,” and “Directions for Administrative Incentives for Performance Audit” of the Bank, with consideration to the general standard within the industry. Furthermore, the remuneration and relevant performance assessment of the Bank’s managers shall be proposed at the meeting of the Remuneration Committee for discussion annually, and the results thereof shall be submitted to the Board for approvals. In particular, performance bonus and employee remuneration are linked to the Bank’s financial results, including net profit before tax, return on assets, return on equity, NPL ratio, and coverage ratio, as well as personal performance evaluation result. The bonus and remuneration are paid in the following year29. In the event that anyone of the President, Executive Vice President, Chief Auditor, and managers is involved in illegal activities and cause losses to the Bank, the person shall be dismissed with the Board’s approval and remuneration be terminated. In addition, the person shall be subject to necessary disciplinary action as applicable under the law. The total remuneration received by individuals with the highest remuneration for the year 2022 was 4.78 times the median of total remuneration received by the other employees in the Bank (excluding said individuals with the highest remuneration).

Notes:

1. The period of various indicators and personal performance evaluation is 1 year. Distribution of performance bonus and employee remuneration cannot be deferred for more than six months.

Employee Salary and Benefits

In response to changes in government laws and regulations and the needs of TBB's business operations, the Bank adjusts and revises relevant regulations in a timely and appropriate manner to meet the needs of TBB employees. TBB has established minimum salary standards (basic salary), and the salary of employees is paid in accordance with "Taiwan Business Bank Employee Salary Payment Guidelines". Personnel of the same grade and the same rank are paid the same salary, and there is no difference due to gender.

In addition, TBB processes labor insurance, national health insurance, pension payment, and other matters in accordance with laws and regulations. We regularly organize employee health checks, provide preferential group medical and accident insurance, protect employees' lives, and enable employees to make full use of their skills on the job without worries.

Ratio of employee salary by gender at important business premises [1]

Ranked Grade 10 or above [3] (including Specialists, Managers, Deputy General Managers, General Managers, etc.)

Gender	Number of People	Percentage of average salary per person [2]
Male	816	49.15%
Female	705	50.85%

Ranked Grade 9 or below [4] (including Assistant Officers, Banking Officers, Senior Clerks, Clerks, Stationed Guards, etc.)

Gender	Number of People	Percentage of average salary per person [2]
Male	1,614	51.91%
Female	2,289	48.09%

Notes:

Units of TBB refer to departments of the head office and the branches.
Example: 49.15% of ''average salary per person for male'' for employees ranked grade 10 and above = [average salary for male/ (average salary for male + average salary for female)] for that grade category.
Gender pay ratio - Female: Male = 1: 0.97
Gender pay ratio - Female: Male = 1:1.08

Ratios of standard entry level wage at important business premises [1] compared to local minimum wage

Item	Entry-level personnel ranked between Grade 5 and 7
Starting salary for entry-level personnel [2]	Between NT$35,234 and NT$45,828
Statutory minimum salary [3]	NT$25,250
Ratio	Between 139.54% and 181.50%

Notes:

Units of TBB refer to departments of the head office and the branches.
There is no gender-based differences in the starting salary for entry-level personnel of TBB.
Minimum monthly wage at December 31, 2022.

Number of full-time non-managerial employees and their average and Median salary

Item	2020	2021	Growth Rate
Number of non-managerial full-time employees (persons)	5,040	5,065	0.50%
Average salary of non-managerial full-time employees (NT$1,000)	1,195	1,283	7.36%
Median salary of non-managerial full-time employees (NT$1,000)	1,069	1,143	6.92%

TBB follows a universal pay system. Employee salaries are determined according to the ''Taiwan Business Bank Employee Salary Payment Guidelines''. Employees on the same pay grade will receive the same salary, which does not differ by gender.

Gender pay equity analysis

Item	Average gender ratio (100% for female)
Senior Management	Salary	100：102.53
Senior Management	Salary and bonuses	100：102.41
Management	Salary	100：95.39
Management	Salary and bonuses	100：95.11
Non-management	Salary	100：105.48
Non-management	Salary and bonuses	100：106.25

Gender pay gap

Item	Gender pay gap 2022 (%)
Average employee hourly wage [1]	5.34%
Median employee hourly wage [2]	13.20%
Average employee bonus [3]	6.55%
Median employee bonus [4]	9.63%

Notes:

Average employee hourly wage = (Average hourly wage for men - Average hourly wage for women)/Average hourly wage for women * 100%.
Median employee hourly wage = (Median hourly wage for men - Median hourly wage for women)/Median hourly wage for women * 100%.
Average employee bonus = (Average bonus for men - Average bonus for women)/Average bonus for women * 100%.
Median employee bonus = (Median bonus for men - Median bonus for women)/Median bonus for women * 100%.

Number of Employees Reinstated from Unpaid Parental Leave and Retention Rate in 2022

Item	Male	Female	Total
a.Total number of employees eligible for parental leave	171	225	396
b.Total number of employees on parental leave	15	99	114
c.Number of employees reinstated from unpaid parental leave in 2022	10	47	57
d.Number of employees that should be reinstated from unpaid parental leave in 2022	11	51	62
e.Number of employees reinstated from unpaid parental leave in 2021	4	41	45
f.Number of employees who have worked for one year after reinstatement from unpaid parental leave in 2021	2	37	39
Rate of reinstatement after parental leave = c/d	90.91%	92.16%	91.94%
Retention rate after parental leave = f/e	50.00%	90.24%	86.67%

The total number of employees eligible for parental leave is the number of employees with a child aged 3 or below (born after December 31, 2019) as of December 31, 2022.

Employee Welfare Measures

The employees of the Bank enjoy comprehensive welfare measures so that employees can enjoy all aspects of welfare measures after work. We seek to create an excellent work environment and improve work efficiency. The Bank's employee welfare measures are listed as follows:

Implementation of Welfare Measures

A.Employee Insurance

Description	Group insurance: The Bank’s Employee Welfare Committee takes out a one-year group life insurance policy for all employees, the cost of which will be fully covered by the welfare fund of the Employee Welfare Committee. In case of on-the-job casualty, the insurance claim will be NT$1,000,000; in case of critical illness, a partial payment of NT$100,000 will be paid first. Group accident and hospitalization insurance: TBB is currently covered by Cathay Life Insurance Company at preferential rates for the Bank's employees and their dependents. In addition to the employees themselves, their parents, spouses and children can be insured. Inpatient medical coverage is available in either daily or pay-as-you-go type. Accident on duty insurance: We insure all of our employees with an accident on duty insurance coverage of NT$3 million. For those who are injured or die in the line of duty, they can apply for compensation from the insurance company.
Implementation Results in 2022	Claims for regular group life insurance for employees Application Period: Sep. 2021 to Aug. 2022 Number of claimed cases: 17 cases Claimed amount: NT$7,200,000

Description

Group insurance: The Bank’s Employee Welfare Committee takes out a one-year group life insurance policy for all employees, the cost of which will be fully covered by the welfare fund of the Employee Welfare Committee. In case of on-the-job casualty, the insurance claim will be NT$1,000,000; in case of critical illness, a partial payment of NT$100,000 will be paid first.
Group accident and hospitalization insurance: TBB is currently covered by Cathay Life Insurance Company at preferential rates for the Bank's employees and their dependents. In addition to the employees themselves, their parents, spouses and children can be insured. Inpatient medical coverage is available in either daily or pay-as-you-go type.
Accident on duty insurance: We insure all of our employees with an accident on duty insurance coverage of NT$3 million. For those who are injured or die in the line of duty, they can apply for compensation from the insurance company.

Implementation Results in 2022

Claims for regular group life insurance for employees

Application Period: Sep. 2021 to Aug. 2022
Number of claimed cases: 17 cases
Claimed amount: NT$7,200,000

B.Employee Welfare Committee

Description	0.5% of the employee's monthly salary is deducted from the welfare fund, and 0.15% of the operating income is allocated to the Employee Welfare Committee to coordinate the use of the employee's welfare. Education scholarships for the children of employees. Sickness relief for employees, as well as their spouses and children. Insured a year of regular group life insurance. Issued on-the-job welfare funds for the three major festivals every year. Childbirth subsidies: Starting from 2018, each child will be subsidized with NT$5,000; in addition, starting from 2020, the Bank has increased the maternity benefit for employees by NT$5,000 for the first child and NT$10,000 for the second child and above.
Implementation Results in 2022	In 2022, the Bank provided education scholarships for a total of NT$184,000. The Employee Welfare Committee and the Bank provided childbirth subsidies for 108 people in 2020, totaling NT$1.21 million; 110 people in 2021, totaling NT$1.39 million; and 115 people in 2022, totaling NT$1.345 million.

Description

0.5% of the employee's monthly salary is deducted from the welfare fund, and 0.15% of the operating income is allocated to the Employee Welfare Committee to coordinate the use of the employee's welfare.

Education scholarships for the children of employees.
Sickness relief for employees, as well as their spouses and children.
Insured a year of regular group life insurance.
Issued on-the-job welfare funds for the three major festivals every year.
Childbirth subsidies: Starting from 2018, each child will be subsidized with NT$5,000; in addition, starting from 2020, the Bank has increased the maternity benefit for employees by NT$5,000 for the first child and NT$10,000 for the second child and above.

Implementation Results in 2022

In 2022, the Bank provided education scholarships for a total of NT$184,000.
The Employee Welfare Committee and the Bank provided childbirth subsidies for 108 people in 2020, totaling NT$1.21 million; 110 people in 2021, totaling NT$1.39 million; and 115 people in 2022, totaling NT$1.345 million.

C.Physical Examination

Description	Physical examination provided to employees is better than the law. Managers have one day of official leave per year to visit hospitals cooperating with TBB for physical examination subsidized by the Bank. Other employees regardless of age receive free physical examination every 2 years. Family members of employees can also participate in physical examination at their own costs. Health consultations with visiting physicians. Health education, health guidance, health consultation and emergency treatment provided by labor health service nurses. Government-funded influenza vaccinations. Government-funded pap smear examination and mammography.
Implementation Results in 2022	Physical examination was provided to a total of 4,625 bank employees and annual checkups to a total of 145 managers. Irregularities found in these exams were managed and followed up with health advice and physical or mental care. were managed and followed up with health advice and physical or mental care. b. A total of 274 consultations were made by visiting physicians and 33 follow-ups by nurses. Assistance was provided 9,870 times to employees in health consultation and education, body temperature monitoring, and blood pressure and other injury/ illness management. A total of 311 employees at the head office and the Chongqing South Road building were vaccinated. A total of 96 employees at the head office and the Chongqing South Road building received pap smear and 26 received mammogram.

Description

Physical examination provided to employees is better than the law. Managers have one day of official leave per year to visit hospitals cooperating with TBB for physical examination subsidized by the Bank. Other employees regardless of age receive free physical examination every 2 years. Family members of employees can also participate in physical examination at their own costs.
Health consultations with visiting physicians.
Health education, health guidance, health consultation and emergency treatment provided by labor health service nurses.
Government-funded influenza vaccinations.
Government-funded pap smear examination and mammography.

Implementation Results in 2022

Physical examination was provided to a total of 4,625 bank employees and annual checkups to a total of 145 managers. Irregularities found in these exams were managed and followed up with health advice and physical or mental care.
were managed and followed up with health advice and physical or mental care. b. A total of 274 consultations were made by visiting physicians and 33 follow-ups by nurses.
Assistance was provided 9,870 times to employees in health consultation and education, body temperature monitoring, and blood pressure and other injury/ illness management.
A total of 311 employees at the head office and the Chongqing South Road building were vaccinated.
A total of 96 employees at the head office and the Chongqing South Road building received pap smear and 26 received mammogram.

D.Subsidies for continued professional development courses

Description	Employees can use their free time to attend language courses and in order to improve the foreign language proficiency of overseas management associates, relevant subsidies can be applied in accordance with the Bank's rules.
Implementation Results in 2022	In 2022, a total of NT$72,750 was provided to employees for participating in language courses, and a total of NT$40,550 was provided for the language certificate test fee subsidy.

E.Consolation payments for the three major festivals

Description	TBB provides consolation payments for the three major festivals to retirees and employees voluntary retired at the age of 60 or above.
Implementation Results in 2022	A total of NT$7,844 thousand was issued to the retired employees as the consolation payment for the three major festivals in 2022.

F.Cafeteria for employees

Description	Provide affordable lunch meals with good value for employees to enjoy.
Implementation Results in 2022	The cafeteria for employees at the Head Office was served by a caterer to provide lunch at a special price and serve seasonal meals during major festivals.

G.Favorable deposit and loan rates for employees

Description	Except for employees in the securities business who are not entitled to favorable deposit rates, all other employees are entitled to favorable deposit and home loan rates.
Implementation Results in 2022	A mortgage loan amount of NT$2.733 billion for employees was newly added in 2022.

H.Non-smoking workplace

Description	The non-smoking signs are posted at the entrances of all business locations (including ATM entrances) to promote the concept of smoking cessation and to provide a smoke-free workplace environment for employees.
Implementation Results in 2022	Continued the implementation.

I.Welfare for child care

Description	Contracted with several kindergartens to provide preferential childcare services to our employees, and set up a breastfeeding room at our Head Office to create a friendly workplace environment.
Implementation Results in 2022	Signed special contracts with 4 kindergartens to provide child care benefits such as registration fees and educational materials for our employees in 2022.

J.Vacation regulations superior than the law

Description	The guidelines of leaves for employees are clearly defined. All leaves of absence are revised in accordance with changes in the law. Paid maternity leave of 8 weeks, paid pregnancy checkup accompaniment and paternity leave of 7 days, ordinary sick leave, bereavement leave, physiological leave, short-term pregnancy (less than three months) maternity leave, paid family care leave, and maternity leave are superior to government regulations.
Implementation Results in 2022	TBB approved 1,304 family care leaves in 2022 with a total of 2,195.75 days. Among them, there are 864 cases with a total of 1,503.875 days for female employees, and 440 cases with a total of 691.875 for male employees, and according to the gender ratio of approved days, 68.49% are female and 31.51% are male. In response to the COVID-19 pandemic and in cooperation with the competent authority’s pandemic prevention measures, the Bank allows employees to apply for extension of the marriage leave deadline.

Description

The guidelines of leaves for employees are clearly defined. All leaves of absence are revised in accordance with changes in the law. Paid maternity leave of 8 weeks, paid pregnancy checkup accompaniment and paternity leave of 7 days, ordinary sick leave, bereavement leave, physiological leave, short-term pregnancy (less than three months) maternity leave, paid family care leave, and maternity leave are superior to government regulations.

Implementation Results in 2022

TBB approved 1,304 family care leaves in 2022 with a total of 2,195.75 days. Among them, there are 864 cases with a total of 1,503.875 days for female employees, and 440 cases with a total of 691.875 for male employees, and according to the gender ratio of approved days, 68.49% are female and 31.51% are male.
In response to the COVID-19 pandemic and in cooperation with the competent authority’s pandemic prevention measures, the Bank allows employees to apply for extension of the marriage leave deadline.

Long-term Incentives

Employee Stock Ownership Trust Program

Starting from 2019, the Bank has inaugurated the “Employee Stock Ownership Trust” program, which provides employees with the option to participate in the stock ownership trust program according to their personal preference, and the Bank has provided a fixed amount of bonus every month to allow employees to share the benefits of the company’s business growth or even stock price increase through long-term stock ownership, so as to strengthen team building and increase the employee retention rate.

Implementation Results in 2022

Year	Number of people with membership qualification (persons)	Number of members (persons)	Percentages of memberships (%)	Shareholdings (shares)	Accounted for issued shares (%)
2020	5,077	4,895	96.42	43,936,055	0.587
2021	5,173	4,935	95.40	71,284,319	0.921
2022	5,207	4,967	95.39	80,378,217	1.001

Retirement Life Assurance

Retirement System

With regard to the sources of expenditures of retirement benefits, TBB processes the retirement of employees in accordance with the "Employee Retirement, Compensation and Severance Guidelines" and the "Collective Bargaining Agreement" signed between TBB and the Union. Employees' retirement is processed in accordance with the Guidelines. In addition, in order to activate human resources, a regular preferential retirement project is implemented, and additional retirement incentives are issued to applicable employees. Retirement matters related to employees are handled in accordance with the Labor Standards Law and other relevant regulations. To pay for the pension of employees eligible for the old labor insurance retirement system, TBB allocates a certain percentage of the employees' salary each month to the labor pension reserve which is deposited in a dedicated account in a financial institution designated by the government. The fund is kept and used by the competent authority.

TBB established the Labor Retirement Reserve Supervision Committee to supervise the use and allocation of the retirement reserve. For employees eligible for the new labor insurance system, TBB allocates the due pension based on the allocation rate each month and deposits the amount in the dedicated personal pension account at the Bureau of Labor Insurance. In addition, employees that meet related conditions are eligible for retirement benefits including favorable deposit interest rate for employees, favorable deposit interest rate for up to NT$6 million based on the years of service, and consolation payments for three festivals. TBB provides consolation payments for three festivals to retirees and employees voluntary retired at the age of 60 or above every year. In 2022, the consolation payments totalled NT$7,844,000, continuing to care for retired employees.

Implementation of Pension Allocation

For employees eligible for the new labor insurance system, TBB allocates the due pension based on the allocation rate (6%) each month and deposits the amount in the dedicated personal pension account at the Bureau of Labor Insurance. To pay for the pension of employees eligible for the old labor insurance retirement system, TBB allocates a certain percentage (7.26% in 2022) of the employees' salary each month in accordance with the Labor Standards Law to the labor pension reserve which is deposited in a dedicated account in a financial institution designated by the government. According to the actuarial evaluation report on the employee pension benefit plan for 2022 submitted by the Mercer (Taiwan) Ltd., the defined benefit cost recognized in profit or loss was NT$171,799,000 in 2022. As of the end of 2022, the balance of the labor retirement reserve account was NT$4,908,848,673.