Remuneration: Value Added System

Bonuses to personnel must be balanced with the company’s short and long term perspectives.

Monday, March 22, 2010

Jorge Londoño, president of Grupo Bancolombia, explained how they applied the Shareholder’s Value Added System (SVA) in this bank, in such a way to prevent short term problems or distortions when applied.

Londoño remarks that “in our philosophy, the size of bonuses does not matter. What matters is that bonuses are related with sustainable profits. In Bancolombia, bonuses are paid 20% to a mutual fund which only invests in Bancolombia shares and from the remaining 80%, a part is paid in cash and the rest goes to an account the employee has in a ‘Bonus Bank’ which allows to withdraw one sixth every six months”.



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