FINANCIAL SERVICES AUTHORITY REGULATION

NUMBER 45 /POJK.03/2015

ON

IMPLEMENTATION OF GOVERNANCE IN THE PROVISION OF REMUNERATION

FOR COMMERCIAL BANKS

BY THE GRACE OF GOD THE ALMIGHTY,

THE COMMISSIONERS COUNCIL OF THE FINANCIAL SERVICES AUTHORITY,

Considering:
a. that in order to face global economic dynamics, the banking industry needs to enhance resilience; b. that this enhancement of resilience is carried out through improved governance in the provision of Remuneration;
c. that improved governance in the provision of Remuneration aims to encourage prudent risk-taking so that the continuity of the Bank's business can be maintained;
d. that in order to create market discipline and in accordance with the development of international standards, transparency of information regarding the provision of Remuneration, both qualitative and quantitative, is necessary; e. that based on the considerations as referred to in letters a, b, c, and d, it is necessary to regulate provisions regarding the implementation of governance in the provision of remuneration for commercial banks;

IN THE NAME OF THE FINANCIAL SERVICES AUTHORITY REPUBLIC OF INDONESIA

COPY

in a Financial Services Authority Regulation.

Recalling:

1. Law Number 7 of 1992 concerning Banking (State Gazette of the Republic of Indonesia Year 1992 Number 31, Supplement to the State Gazette of the Republic of Indonesia Number 3472) as amended by Law Number 10 of 1998 (State Gazette of the Republic of Indonesia Year 1998 Number 182, Supplement to the State Gazette of the Republic of Indonesia Number 3790);
2. Law Number 21 of 2011 concerning the Financial Services Authority (State Gazette of the Republic of Indonesia Year 2011 Number 111, Supplement to the State Gazette of the Republic of Indonesia Number 5253);

RESOLVING:

To Establish: FINANCIAL SERVICES AUTHORITY REGULATION ON IMPLEMENTATION OF GOVERNANCE IN THE PROVISION OF REMUNERATION FOR COMMERCIAL BANKS.

CHAPTER I

GENERAL PROVISIONS

Article 1

In this Financial Services Authority Regulation, the following terms are defined:

1. Bank means Commercial Bank as referred to in Law Number 7 of 1992 concerning Banking as amended by Law Number 10 of 1998, including branches of the bank located outside the country.
2. Foreign Bank means:
   a. a branch of a bank located outside the country; b. a Bank owned individually or jointly by foreign citizens and/or foreign legal entities by 50% (fifty percent) or more; or
   c. a Bank owned individually or jointly by foreign citizens and/or foreign legal entities by less than 50% (fifty percent) but controlled by such foreign citizens and/or foreign legal entities.
3. Board of Directors means:
   a. for a Bank in the form of a Limited Liability Company, the Board of Directors as referred to in the provisions of legislation concerning limited liability companies; b. for a Bank in the form of a Regional-Owned Enterprise, the Board of Directors as referred to in the provisions of legislation concerning regional-owned enterprises;
   c. for a Bank in the form of a Cooperative, the managers as referred to in the provisions of legislation concerning cooperatives;
   d. for a branch of a bank located outside the country, the branch head and one level below the branch head.
4. Board of Commissioners means:
   a. for a Bank in the form of a Limited Liability Company, the Board of Commissioners as referred to in the provisions of legislation concerning limited liability companies; b. for a Bank in the form of a Regional-Owned Enterprise, the supervisors as referred to in the provisions of legislation concerning regional-owned enterprises;
   c. for a Bank in the form of a Cooperative, the supervisors as referred to in the provisions of legislation concerning cooperatives.
5. Remuneration means compensation determined and given to members of the Board of Directors, members of the Board of Commissioners and/or Employees, whether fixed or variable, in cash or non-cash form, in accordance with their duties, authorities, and responsibilities.
6. Fixed Remuneration means remuneration that is not linked to performance and risk, including but not limited to basic salary, facilities, housing allowance, health allowance, education allowance, holiday allowance, and pension.
7. Variable Remuneration means Remuneration that is linked to performance and risk, including but not limited to bonuses or other forms equivalent to it.
8. Bank Employees, hereinafter referred to as Employees, means persons who work at the Bank based on an agreement to carry out a job in a position or specific activity in exchange for compensation, including Employees with fixed-term employment contracts.
9. Malus is a policy that allows the Bank, based on certain criteria, to defer payment of part or all of the Deferred Variable Remuneration.
10. Clawback is an agreement between the Bank and members of the Board of Directors, members of the Board of Commissioners or Employees whereby the members of the Board of Directors, members of the Board of Commissioners or Employees agree to return the Variable Remuneration received provided that certain criteria as determined by the Bank are met.

Article 2

(1) Banks are required to implement governance in the provision of Remuneration.
(2) The implementation of governance in the provision of Remuneration must at least cover:
a. duties and responsibilities of the Board of Directors and Board of Commissioners; b. duties and responsibilities of the Remuneration Committee;
c. application of prudential principles in the provision of Remuneration; and
d. Remuneration disclosure.

CHAPTER II

DUTIES AND RESPONSIBILITIES OF THE BOARD OF DIRECTORS AND BOARD OF COMMISSIONERS

Article 3

Banks are required to have written Remuneration policies for the Board of Directors, Board of Commissioners, and Employees.

Article 4

The Board of Directors is required to formulate Remuneration policies as referred to in Article 3 which must at least contain:
a. Remuneration structure which must at least cover:

1. Remuneration scales based on level and position; and
2. Remuneration components;
   b. methods and mechanisms for determining Remuneration.

Article 5

The formulation of Remuneration policies as referred to in Article 4 must at least consider:
a. the creation of effective risk management; b. the financial stability of the Bank;
c. the adequacy and strengthening of the Bank's capital;
d. short-term and long-term liquidity needs; and e. potential income in the future.

Article 6

The Board of Commissioners must at least carry out:
a. supervision over the implementation of Remuneration policies; and b. periodic evaluation of Remuneration policies based on the results of supervision as referred to in letter a.

CHAPTER III

DUTIES AND RESPONSIBILITIES OF THE REMUNERATION COMMITTEE

Article 7

(1) In carrying out duties as referred to in Article 6, the Board of Commissioners is required to form a Remuneration Committee.
(2) The Remuneration Committee as referred to in paragraph (1) must at least consist of:
a. one Independent Commissioner; b. one Commissioner; and
c. one Executive Officer who oversees Human Resources or one Employee representative.
(3) The Remuneration Committee is chaired by an Independent Commissioner.
(4) Members of the Board of Directors are prohibited from becoming members of the Remuneration Committee as referred to in paragraph (2). (5) In the event that the members of the Remuneration Committee are determined to be more than 3 (three) persons, the number of Independent Commissioners must be at least 2 (two) persons.

Article 8

The formation of a Remuneration Committee for branches of banks located outside the country is adjusted to the organizational structure applicable to the respective bank.

Article 9

The Remuneration Committee is required to carry out duties and responsibilities independently.

Article 10

The Remuneration Committee is required to carry out duties and responsibilities at least:
a. conducting evaluations of Remuneration policies based on performance, risk, fairness with peer groups, targets, and the Bank's long-term strategy, fulfillment of reserves as regulated in legislation, and the Bank's potential income in the future; b. submitting evaluation results and recommendations to the Board of Commissioners regarding:

1. Remuneration policies for the Board of Directors and Board of Commissioners to be submitted to the General Meeting of Shareholders;
2. Remuneration policies for Employees as a whole to be submitted to the Board of Directors;
   c. ensuring that Remuneration policies comply with applicable regulations; and
   d. conducting periodic evaluations of the implementation of Remuneration policies.

CHAPTER IV

APPLICATION OF PRUDENTIAL PRINCIPLES IN THE PROVISION OF REMUNERATION

Article 11

In implementing governance as referred to in Article 2, Banks are required to pay attention to prudential principles in the provision of Remuneration, both Fixed Remuneration and Variable Remuneration.

First Section

Fixed Remuneration

Article 12

Fixed Remuneration policies must at least consider business scale, business complexity, peer groups, inflation rates, conditions, and financial capabilities, and must not conflict with applicable legislation.

Second Section

Variable Remuneration

Article 13

Variable Remuneration policies, in addition to considering Article 12, are also required to encourage prudent risk-taking.

Article 14

In determining Variable Remuneration policies as referred to in Article 13, the Remuneration Committee as referred to in Article 7 paragraph (1) is required to coordinate with the risk management work unit.

Article 15

The provision of Variable Remuneration to the Board of Directors, Board of Commissioners and/or Employees must consider:
a. performance, namely:

1. performance of the Board of Directors, Board of Commissioners, or Employees;
2. business unit performance;
3. Bank performance; and
   b. risk.

Article 16

Banks determine the performance measurement methods and types of risk in determining the provision of Variable Remuneration in accordance with the scale and complexity of the Bank's business activities.

Article 17

(1) Variable Remuneration can be given in the form of:
a. cash; and/or b. shares or share-based instruments issued by the Bank.
(2) Variable Remuneration given by Banks with public company status (go public) must be in the form of shares or share-based instruments issued by the respective Bank by a certain percentage of the Variable Remuneration.

Article 18

Variable Remuneration in the form of shares or share-based instruments for Independent Commissioners is converted and given in cash form.

Article 19

In the event that the Bank incurs losses, the Bank may:
a. not distribute; or b. distribute with a relatively small value, Variable Remuneration to the Board of Directors, Board of Commissioners and/or Employees.

Article 20

The provision of Variable Remuneration to Employees in control units is carried out in accordance with performance while still paying attention to objectivity and independence.

Article 21

(1) Banks are prohibited from unconditionally guaranteeing the provision of a specific amount of Variable Remuneration to the Board of Directors, Board of Commissioners and/or Employees. (2) The prohibition as referred to in paragraph (1) does not apply to the first year since the respective person works at the Bank.

Third Section

Material Risk Takers

Article 22

Banks are required to determine parties who are material risk takers, which must at least meet the following criteria:
a. the Board of Directors and/or other Employees who, due to their duties and responsibilities, make decisions that have a significant impact on the Bank's risk profile; or b. the Board of Directors, Board of Commissioners and/or Employees who receive Variable Remuneration with a large value.

Article 23

(1) Banks are required to defer the payment of Variable Remuneration to parties who are material risk takers by a certain percentage. (2) The size of the deferral percentage as referred to in paragraph (1) is adjusted to the level of position.

Article 24

(1) The deferral period for the payment of Variable Remuneration as referred to in Article 23 paragraph (1) must be at least 3 (three) years. (2) The determination of the deferral period for the payment of Variable Remuneration as referred to in paragraph (1) can be adjusted to a longer period in accordance with the risk time horizon.

Article 25

The payment of Deferred Variable Remuneration as referred to in Article 23 paragraph (1) must be given pro-rata in accordance with the period as referred to in Article 24.

Article 26

(1) Banks may defer the payment of Deferred Variable Remuneration (malus) or withdraw Variable Remuneration that has already been paid (clawback) to parties who are material risk takers under certain conditions. (2) Banks determine the certain conditions as referred to in paragraph (1).

Article 27

Parties who are material risk takers are prohibited from hedging the Deferred Variable Remuneration.

CHAPTER V

DISCLOSURE

Article 28

(1) Banks are required to disclose Remuneration policy information in the annual report on governance implementation as regulated in provisions concerning the implementation of Good Corporate Governance for commercial banks. (2) Remuneration policy information that must be disclosed as referred to in paragraph (1) must at least cover:
a. Remuneration Committee including:

1. names of members, composition, duties and responsibilities;
2. number of meetings held; and
3. Remuneration paid to Remuneration Committee members during 1 (one) year;
   b. the process of formulating Remuneration policies which includes:
4. review of the background and objectives of Remuneration policies;
5. implementation of review of Remuneration policies in the previous year, along with improvements; and
6. mechanisms to ensure that Remuneration for Employees in control units is independent from the work units they oversee;
   c. scope of Remuneration policies and their implementation per business unit, per region, and in subsidiaries or branches located outside the country;
   d. Remuneration linked to risk which includes:
7. types of key risks used in implementing Remuneration;
8. criteria for determining key risk types, including for risks that are difficult to measure;
9. impact of determining key risks on Variable Remuneration policies; and
10. changes in the determination of key risk types compared to the previous year along with reasons, if any;
    e. performance measurement linked to Remuneration which includes:
11. review of Remuneration policies linked to performance assessment;
12. methods for linking individual Remuneration with Bank performance, work unit performance, and individual performance; and
13. description of methods used by the Bank to state that agreed performance cannot be achieved so that adjustments to remuneration are necessary and the magnitude of remuneration adjustments if such conditions occur;
    f. Remuneration adjustments linked to Performance and Risk which includes:
14. policies regarding Deferred Variable Remuneration, its magnitude, and criteria for determining such magnitude; and
15. Bank policies regarding Deferred Variable Remuneration whose payment is deferred (malus), or withdrawn if already paid (clawback);
    g. names of external consultants and tasks of consultants related to Remuneration policies, if the Bank uses external consultant services; h. Remuneration packages and facilities received by the Board of Directors and Board of Commissioners including Remuneration structure and details of nominal amounts;
    i. Variable Remuneration, including:
16. forms of Variable Remuneration along with reasons for choosing such forms; and
17. explanation if there are differences in the provision of Variable Remuneration among the Board of Directors, Board of Commissioners and/or Employees;
    j. number of Board of Directors, Board of Commissioners and Employees who received Variable Remuneration during 1 (one) year, and the total nominal amount; k. positions and number of parties who are material risk takers;
    l. share options owned by the Board of Directors, Board of Commissioners, and Executive Officers;
    m. ratio of highest and lowest salaries; n. number of recipients and total amount of Variable Remuneration unconditionally guaranteed to be given by the Bank to prospective Directors, prospective Commissioners, and/or prospective Employees during the first 1 (one) year of work as referred to in Article 21; o. number of Employees terminated and total nominal severance pay paid; p. total amount of Deferred Variable Remuneration, consisting of cash and/or shares or share-based instruments issued by the Bank; q. total amount of Deferred Variable Remuneration paid during 1 (one) year; r. details of Remuneration given in one year including:
18. Fixed and Variable Remuneration;
19. Deferred and non-Deferred Remuneration; and
20. forms of Remuneration given in cash and/or shares or share-based instruments issued by the Bank;
    s. quantitative information regarding:
21. total remaining Deferred Remuneration both exposed to implicit and explicit adjustments;
22. total reduction of Remuneration caused by explicit adjustments during the reporting period;
23. total reduction of Remuneration caused by implicit adjustments during the reporting period.

Article 29

Banks present information as referred to in Article 28 paragraph (2) in the form of:
a. tables or graphs; and/or b. comparison with the previous 1 (one) year reporting period.

CHAPTER VI

OTHERS

Article 30

(1) The Financial Services Authority supervises the implementation of Bank Remuneration policies in accordance with this Financial Services Authority Regulation. (2) In the event that the Financial Services Authority assesses that the Bank has not implemented Remuneration policies in accordance with this Financial Services Authority Regulation, the Financial Services Authority orders the Bank to take corrective steps.

Article 31

(1) Under certain conditions, the Financial Services Authority is authorized to:
a. conduct a review of the magnitude of Variable Remuneration for the Board of Directors, Board of Commissioners, and/or Employees; and/or b. order the Bank to adjust Variable Remuneration policies. (2) The Financial Services Authority is authorized to appoint an independent party to conduct the review as referred to in paragraph (1) letter a.

Article 32

(1) Banks with Indonesian legal entity status are required to implement and monitor the implementation of Remuneration policies in accordance with this Financial Services Authority Regulation to the Bank's branch network outside the country. (2) In the event that Remuneration provisions in the country where the Bank's branch network is located as referred to in paragraph (1) differ from these provisions, the Bank is required to implement Remuneration policies at least in accordance with this Financial Services Authority Regulation. (3) The Financial Services Authority is authorized to coordinate in the context of home-host supervision to ensure the implementation of Remuneration policies.

CHAPTER VII

SANCTIONS

Article 33

Banks that do not fulfill the provisions as regulated in Article 2, Article 3, Article 4, Article 5, Article 6, Article 7, Article 9, Article 10, Article 11, Article 12, Article 13, Article 14, Article 15, Article 17 paragraph (2), Article 21 paragraph (1), Article 22, Article 23 paragraph (1), Article 25, Article 27, Article 28, Article 32 paragraph (1) and paragraph (2), Article 34 or Article 35, are subject to administrative sanctions including:
a. written reprimand; and/or b. reduction of the Good Corporate Governance factor rating.

CHAPTER VIII

TRANSITIONAL PROVISIONS

Article 34

For Banks that do not yet have or have Remuneration policies but are not in accordance with the Remuneration policies as regulated in this Financial Services Authority Regulation, are required to adjust Remuneration policies by referring to this Financial Services Authority Regulation within a maximum period of 1 (one) year from the implementation of this Financial Services Authority Regulation.

Article 35

With the implementation of this Financial Services Authority Regulation, the duties and responsibilities of existing Remuneration Committees that are not in accordance with those regulated in this Financial Services Authority Regulation are required to adjust to this Financial Services Authority Regulation.

Article 36

Sanction provisions as referred to in Article 33 begin to apply since the date:
(1) January 1, 2019, for Foreign Banks, BUKU 3 Banks, and BUKU 4 Banks; and (2) January 1, 2020, for BUKU 1 and BUKU 2 Banks that are not Foreign Banks.

CHAPTER IX

CLOSING PROVISIONS

Article 37

Further provisions regarding the implementation of governance in the provision of remuneration based on performance and risk are regulated by a Circular Letter of the Financial Services Authority.

Article 38

With the implementation of this Financial Services Authority Regulation, Article 61 paragraph (2) letters d, e, and f, and paragraph (3) of Bank Indonesia Regulation Number 8/4/PBI/2006 concerning the Implementation of Good Corporate Governance for Commercial Banks as amended by Bank Indonesia Regulation Number 8/14/PBI/2006 concerning Amendment to Bank Indonesia Regulation Number 8/4/PBI/2006 concerning the Implementation of Good Corporate Governance for Commercial Banks are declared invalid.

Article 39

This Financial Services Authority Regulation begins to apply on the date:
(1) January 1, 2016 for Foreign Banks, BUKU 3 Banks, and BUKU 4 Banks; and (2) January 1, 2017 for BUKU 1 and BUKU 2 Banks that are not Foreign Banks.

In order for everyone to know it, it is ordered to promulgate this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.

Determined in Jakarta
On the date 23 December 2015
CHAIRMAN OF THE COMMISSIONERS COUNCIL
FINANCIAL SERVICES AUTHORITY, signed
MULIAMAN D. HADAD

Promulgated in Jakarta
On the date 28 December 2015
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signed
YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2015 NUMBER 371

Copy in accordance with the original
Director of Law 1
Department of Law signed
Sudarmaji

EXPLANATION

OF

FINANCIAL SERVICES AUTHORITY REGULATION

NUMBER 45 /POJK.03/2015

ON

IMPLEMENTATION OF GOVERNANCE IN THE PROVISION OF REMUNERATION

FOR COMMERCIAL BANKS

I. GENERAL

One of the factors contributing to the occurrence of the global economic crisis in 2007 was the provision of high bonuses due to achieving set targets while ignoring risks that would arise in the future, thereby endangering the Bank's financial condition if the Bank is unable to absorb such losses. Corrective actions to correct these unhealthy bonus practices subsequently became an agenda in the global financial system reform program and on September 25, 2009, the Financial Stability Board issued the Principles for Sound Compensation Practices.

The reform program aims to (i) prevent the emergence of moral hazard and prioritize prudential elements in Bank management; (ii) maintain the health of Banks individually; and (iii) mitigate excessive risk-taking by decision-makers. Indonesia, as one of the G-20 members, is committed to adopting these principles in the form of regulations.

In line with the implementation of Basel II, specifically Pillar 3 (Market Discipline), Banks are required to disclose more transparent information to the public and market players, particularly regarding Remuneration, to encourage discipline and so that stakeholders...

interests can provide a fair assessment.
However, this information disclosure is carried out while maintaining the Bank's competitive advantage. Therefore, it is necessary to regulate the scope of information, both qualitative and quantitative, that must be disclosed so that competition among Banks remains maintained. In this regard, it is necessary to regulate the implementation of governance in the provision of remuneration in a Financial Services Authority Regulation.

II. ARTICLE BY ARTICLE

Article 1
It is clear enough.

Article 2
It is clear enough.

Article 3
It is clear enough.

Article 4
It is clear enough.

Article 5
Letter a
It is clear enough.

Letter b
It is clear enough.

Letter c
The term "adequacy and strengthening of Bank capital" means that Remuneration policy can maintain the Bank's business continuity so that it is able to survive and develop, and is able to compete in the global market and in its peer group. Bank capital adequacy includes capital adequacy in the context of fulfilling regulatory capital as well as Individual Capital Adequacy Assessment Process (ICAAP).

Letter d
It is clear enough.

Letter e
It is clear enough.

Article 6
It is clear enough.

Article 7
Paragraph (1)
It is clear enough.

Paragraph (2)
Regulations regarding the membership of the Remuneration Committee refer to regulations regarding the implementation of Good Corporate Governance for commercial banks.

Paragraph (3)
It is clear enough.

Paragraph (4)
It is clear enough.

Paragraph (5)
It is clear enough.

Article 8
It is clear enough.

Article 9
The term "independent" means the execution of duties objectively and free from pressure and interests of any party.

Article 10
Regulations regarding the duties and responsibilities of the Remuneration Committee refer to regulations regarding the implementation of Good Corporate Governance for commercial banks.

Letter a
The term "performance" refers to financial performance, Bank performance, business unit performance, and individual performance.
The term "reserve" refers to reserves as referred to in the Law on Limited Liability Companies.

Letter b
It is clear enough.

Letter c
It is clear enough.

Letter d
Evaluation of Remuneration policy and its implementation is an inseparable part of the Bank's risk management framework.

Article 11
The term "paying attention to prudential principles in the provision of Remuneration" means considering:
a. the creation of effective risk management; b. the financial stability of the Bank;
c. the adequacy and strengthening of Bank capital;
d. short-term and long-term liquidity needs; and e. potential income in the future.

Article 12
It is clear enough.

Article 13
The term "prudent risk taking" means that risk-taking in conducting business activities is carried out measurably and refers to regulations regarding risk management.

Article 14
It is clear enough.

Article 15
Letter a
It is clear enough.

Letter b
The term "risk" includes risks that have already occurred and risks that may occur. Types of risks refer to regulations governing the implementation of risk management for commercial banks.

Article 16
It is clear enough.

Article 17
Paragraph (1)
Letter a.
It is clear enough.

Letter b.
The term "shares" refers to new shares issued by the Bank or shares of the Bank in question purchased on the exchange using the Bank's funds.

Paragraph (2)
The term "shares" refers to new shares issued by the Bank or shares of the Bank in question purchased on the exchange using the Bank's funds.

Article 18
It is clear enough.

Article 19
The term "loss" means the Bank does not obtain profit in the fiscal year that becomes the basis for the calculation of the provision of Variable Remuneration.

In determining that Variable Remuneration is relatively small or not distributed at all because the Bank experienced a loss, it is based on the principle of paying attention to prudential principles in the provision of Remuneration.

Article 20
Those included in the control unit include the risk management work unit, compliance function, and internal audit work unit.

Article 21
It is clear enough.

Article 22
It is clear enough.

Article 23
Paragraph (1)
It is clear enough.

Paragraph (2)
The term "adjusted to the level of position" means that the higher the position, the greater the percentage of Variable Remuneration that is deferred.

Article 24
Paragraph (1)
The determination of a period of at least 3 (three) years has already taken into account the risks that will occur.

Paragraph (2)
Example:
Employee A is included in the category of material risk takers who has decided on a large foreign currency credit for repayment within a period of 3 (three) years. The Bank assesses the potential (risk) of credit repayment failure due to the strengthening of the foreign currency value. For that reason, Employee A's Remuneration can be deferred by the Bank for more than 3 (three) years, for example 4 (four) years.

Article 25
Example:
Employee A is included in the party who is a material risk taker. In January 2015, A was decided to receive a 2014 bonus of Rp1,000,000,000.00 (one billion rupiah). According to Bank policy, bonus payment is made at the end of January 2015 and the percentage of bonus deferred is 60% (sixty percent). At the end of January 2015, A receives 40% (forty percent) or an amount of Rp400,000,000.00 (four hundred million rupiah). The remainder of 60% (sixty percent) or an amount of Rp600,000,000.00 (six hundred million rupiah) is deferred for 3 years and will be paid over 3 years, namely in 2015 (after January), 2016, and 2017 on a pro-rata basis, namely each Rp200,000,000.00 (two hundred million rupiah) per year.

Article 26
Paragraph (1)
It is clear enough.

Paragraph (2)
The term "certain conditions" includes among others the Bank experiencing a loss, the occurrence of risks that have a negative impact on the Bank's finances, or the occurrence of fraud committed by parties who are material risk takers that harm the Bank.

Article 27
Hedging examples include insuring Deferred Variable Remuneration.

Article 28
Paragraph (1)
It is clear enough.

Paragraph (2)
Letter a
It is clear enough.

Letter b
It is clear enough.

Letter c
It is clear enough.

Letter d
It is clear enough.

Letter e
It is clear enough.

Letter f
It is clear enough.

Letter g
It is clear enough.

Letter h
It is clear enough.

Letter i)
Number 1)
The term "forms of Variable Remuneration" refers to cash and/or shares or share-based instruments.

Number 2).
Differences in the provision of Variable Remuneration can be differences in composition (cash and/or shares or share-based instruments) as well as the percentage amount of Remuneration.

Letter j
It is clear enough.

Letter k
It is clear enough.

Letter l
It is clear enough.

Letter m
It is clear enough.

Letter n
It is clear enough.

Letter o
The term "termination of employment" refers to termination of employment that occurs not due to a request from the Board of Directors, Board of Commissioners, and/or the Employee in question, but due to Bank policies such as mergers, consolidations, acquisitions, or streamlining of the Bank's organizational structure. Not included in the meaning of termination of employment in this paragraph is termination of employment caused by violations of regulations or fraud.

Letter p
It is clear enough.

Letter q
It is clear enough.

Letter r
It is clear enough.

Letter s
Implicit adjustment is an adjustment that occurs due to factors outside the Bank's power such as stock price movements, while explicit adjustment is an adjustment that is directly influenced by the Bank such as a reduction in remuneration payments because certain targets are not met.

Article 29
Presentation in the form of tables or graphs and comparisons with previous reporting periods are intended, among other things, to know the trends of development that occur and to increase the clarity of information.

Article 30
Paragraph (1)
Supervision over the implementation of the Bank's Remuneration policy is carried out, among others, within the framework of the Bank's risk management.

Paragraph (2)
It is clear enough.

Article 31
Paragraph (1)
The term "certain conditions" includes among others the Bank in special supervision status or the Bank in rehabilitation in accordance with regulations regarding the determination of status and follow-up supervision of conventional commercial banks.

Paragraph (2)
It is clear enough.

Article 32
It is clear enough.

Article 33
It is clear enough.

Article 34
It is clear enough.

Article 35
It is clear enough.

Article 36
It is clear enough.

Article 37
It is clear enough.

Article 38
It is clear enough.

Article 39
It is clear enough.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 5811 ---