Compensation Policy

Sabah Bedding bases its Compensation Policy on the following core values. These values are upheld in all compensation practices.

Fair
Transparent
Based on measurable and balanced performance goals
Encouraging sustainable success
Must be aligned with Risk Management principles.

Compensation Policy Principles

The primary goal of the Compensation Policy is to maintain internal and external balance within the wage structure. Internal balance is achieved through the principles of "equal pay for equal work" and "performance-based compensation." For external balance, data from wage surveys conducted by independent research organizations are taken into consideration.

Living Wage

Sabah Bedding adopts a living wage policy to ensure that its employees can maintain their living standards and meet their essential needs. A living wage refers to the level of income required for employees not only to meet their basic needs but also to maintain their social lives and safeguard the well-being of their families.

In determining wages, Sabah Bedding considers local economic conditions, living wage research and industry data, implementing a remuneration policy that enables employees to maintain an adequate standard of living. This approach aims to provide wages above the statutory minimum wage and appropriate to the cost of living in the regions where employees reside.

Sabah Bedding conducts living wage analyses to compare employee remuneration with up-to-date living wage benchmarks and regional living costs. The results of these analyses are taken into account when evaluating remuneration practices and identifying areas for improvement.

Equal Pay for Equal Work

All of our employees are compensated in alignment with the job value of the tasks they perform. To ensure this, "Salary Bands," which define the value of each role, are used as a basis. Each role has a salary scale with defined minimum and maximum values. Employees are compensated within these salary scales based on their experience and performance.

Performance-Based Compensation

All of our employees receive salary increases based on performance scores given by their managers, which are based on objective criteria, and their position within the salary scale. Among employees performing the same role, those with higher performance and relatively lower salaries receive larger increases, aiming to reduce wage disparities.

Market Sensitivity

Sabah Bedding takes into account the results of salary surveys conducted by independent organizations, including the Turkish Banking Sector and national wage studies, when determining its employees' salaries and bonuses. The primary approach in setting salary and bonus amounts is to ensure a fair compensation level by considering the total income employees will earn throughout the year.

Alignment with Risk Management Principles

A compensation model that takes into account the risk management concepts applied within the bank is used. In this context, compensation policies are adopted that align with the bank’s long-term goals and risk management structures, while also preventing excessive risk-taking. In cases where capital adequacy is at risk or in other necessary circumstances, Sabah Bedding may adopt a more conservative approach to all compensation matters, particularly regarding variable compensation.

Rewarding Sustainable, Long-Term Success

In rewarding employees' periodic achievements, especially through bonus payments, compensation is provided over an appropriate time frame based on the nature of the work. Adjustments are made in a way that directly affects previous earnings in cases of future failures or any facts that may be discovered later regarding past performance.

Performance Management System Principles

It is a model that is transparent, measurable, and evaluated by both employees and relevant managers, providing fair and comprehensive feedback.

Transparent

The employee is aware of the criteria by which they are being evaluated.

Measurable

All employees are expected to have transparent, measurable, and objective performance goals, aligned with company strategies, at both individual and/or team levels.

Inclusive

In employee evaluations, assessments are gathered not only from the immediate manager but also from a higher-level manager and the Human Resources Department officials. All employees have the right to provide preliminary input and/or disagree with the outcome or feedback of their performance evaluations.

Competency Assessment

In addition to objective performance criteria, employees are also evaluated based on competencies specific to their roles.

Fair and Comprehensive Feedback

All employees have the right to receive verbal feedback from their managers regarding their personal performance. In meetings held for this purpose, the employee's performance is evaluated together with them based on objective criteria, and they are provided with detailed information about personal development and career opportunities.

Key Components of Compensation

Fixed Income Practices

Definition of Fixed Income: They are fixed payments made regularly on a monthly basis. They consist of a base salary, bonuses, and additional allowances. The base salary is fundamentally determined by the individual's position and takes into account criteria such as experience and performance.

Increase timings: Salary increases are made twice a year in January and July, taking into account government decisions.

Types of increases: There are two types of salary increases for Sabah Bedding employees, provided their performance is at a certain level:

Base increase: The increase rate determined primarily by taking inflation into account.
Performance increase: The varying increase rate based on the performance levels of the employees.

Variable Income (Bonus) Applications

Definition of Variable Income: These are cash or non-cash payments made to reward an employee's performance during the relevant period.

Communication of Compensation Practices

Communication of compensation practices at Sabah Bedding is announced on WhatsApp, just like all other HR practices, based on criteria that form the foundation of these practices (performance, bonus criteria, reports, salary bands). Additionally, all changes are shared through internal announcements.

All our managers are informed about the content of periodic practices, such as salary increases and bonus payments, as well as all parameters related to payments concerning themselves and their teams.

Compensation Committee

To ensure an independent and effective compensation system at Morning Bedding and to monitor and audit compensation practices on behalf of the Board of Directors, the Board appoints at least two representatives as members of the Compensation Committee. The Human Resources Department will serve as the reporting body for the Compensation Committee.

The responsibilities of the Compensation Committee include:

Preparing decisions related to compensation submitted for the approval of the Board of Directors, especially regarding the compensation of key employees.
Regular monitoring of the alignment and effectiveness of compensation policies with the bank's risk appetite and objectives.
Providing opinions and support to the Board concerning the establishment and functioning of the compensation system.
Overseeing the compensation of senior management within the scope of internal systems.

Implementation of the Policy

Changes to the provisions outlined in the Compensation Policy are implemented upon the recommendation of the Compensation Committee and approval of the Board of Directors, and are carried out by the Human Resources Department.

LEVENT SOLMAZ

CHAIRMAN OF THE BOARD