Bangkok--25 Jun--TMB
TMB today announced it is introducing the “TMB Performance Share Bonus Program” (TMB PSBP), open to all employees and mandatory for senior management. The TMB PSBP will motivate employees to create value, develop innovative customer propositions and provide positive, sustainable returns to TMB's shareholders while helping to retain the Bank's top talent.
With the launch of the TMB PSBP, TMB becomes the first registered company on the Stock Exchange of Thailand to introduce such an innovative compensation plan for employees. Under the program, TMB will pay part of the employee's performance bonus in cash and the remaining portion in the form of the Bank's ordinary shares. TMB will issue 400 million ordinary shares or 0.9% of the total registered shares of the Bank for TMB PSPB during the performance years of 2010 until 2012. The price of shares under TMB PSPB will be based on fair market value averaged over a 90-day period prior to availability, in the form of a bonus for each of the three performance years.
The shares issued for each of the performance years will be divided into three equal parts. Each year, an employee will be given one-third of the shares from the preceding performance year.
The motivational impact of TMB PSBP is two-fold. First, good performance by both the Bank and the individual will yield an employee bonus in the form of cash and TMB shares. Second, the program is designed to motivate the employee base to consolidate their efforts in order to meet the Bank’s performance targets thus creating value on TMB's share price.
“The Performance Share Bonus Program is another major step in TMB becoming a customer-centric, high-performance organization. It will be a strong motivator for TMB’s senior management to ensure the Bank meets its growth goals by delivering real shareholders,” said Mr. Boontuck Wungcharoen, Chief Executive Officer, TMB Bank. “We have also extended the program to all other TMB employees who can choose to receive up to half of their annual bonus in shares, so they too can enjoy the long-term benefits of being a TMB shareholder.
"As they have greater responsibility in terms of driving TMB’s overall growth and financial performance, TMB’s senior management is required to participate in the TMB PSBP."
During the Extraordinary General Meeting of Shareholders on 24 June 2010, TMB shareholders approved the TMB PSBP which takes effect for the 2010-2012 performance years.
The Extraordinary General Meeting also approved TMB's plan to reduce the par value of its 43.5 billion shares, currently at 10 Baht per share, to 0.95 Baht per share. The share discount of 303.1 billion baht and retained loss of 101.8 billion baht will be wiped out from the Bank’s balance sheet through this accounting mechanism. This accounting exercise will clear retained losses from TMB’s balance sheet, opening the way for TMB to start paying dividends to shareholders when the Bank makes a profit. The accounting exercise will not have any effect on the Bank's capital base which now has a capital adequacy ratio (CAR) of 18.6% compared to the minimum requirement of 8.5% as set by the Bank of Thailand. The high capital adequacy ratio reflects TMB's strong financial position for loan growth according to the Bank's business plan.
TMB will work with relevant regulatory bodies to complete the common share par reduction process by the end of June 2010.
TMB Bank Public Company Limited
Founded on 8 November 1957, TMB Bank Pcl. operates a commercial banking business under a license granted by the Ministry of Finance, and with consent given by the Bank of Thailand. It also operates a securities business licensed by the Ministry of Finance and agreed to by the Securities Exchange Commission.
TMB aims to respond to the needs of its clients through its 458 branch network, 100 foreign exchange centers 2,278 ATMs, as well as electronics banking systems. Its business encompasses commercial banking, offshore banking, investment banking, and other businesses as permitted by the regulatory authorities, including acting as an insurance agent for its alliance insurance companies.
Listed on the Stock Exchange of Thailand, TMB is the sixth largest bank, by total assets, in Thailand. As at 31 March 2010, its total assets are valued at THB 560,028 million.
www.tmbbank.com
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