Directors’ Remuneration Report continued As at 31 December 2018, Mr Kiknavelidze’s vested and unvested shareholding was 130,370 BOGG shares, representing approximately 0.3% of the share capital of BOGG. The vesting period for the majority of unvested shares exceeds three years. None of Mr Kiknavelidze’s connected persons have any interests in the shares of the Company. The Policy is heavily weighted towards remuneration in deferred salary shares and discretionary compensation in deferred shares. The Policy and the long vesting periods, even for salary shares, naturally results in the Executive Director and our Executive Management team holding a significant number of unvested shares and achieves a delay between performance and vesting. We believe these results are consistent with the principles of the Investment Management Association. However to further strengthen this, under the new proposed Policy, the Company is introducing formal guidelines on shareholding and on post-employment shareholding. The Group does not require Non-Executive Directors to hold a specified number of shares in Bank of Georgia Group. Notwithstanding this, some Non-Executive Directors have chosen to become shareholders. There have been no changes in the Non-Executive Directors’ Bank of Georgia Group shareholdings since the date of their appointment to the Board further to those reported above. Details of Non-Executive Directors’ terms of appointment The Company has entered into letters of appointment with each Non-Executive Director. The letters of appointment require Non-Executive Directors to provide one month’s notice prior to termination. The letters of appointment for the majority of current Non-Executive Directors are effective from 24 February 2018, with Véronique McCarroll and Andreas Wolf’s letters of appointment being effective from 1 October 2018. Each Non-Executive Director is put forward for election at each Annual General Meeting following his or her appointment. Continuation of a Non-Executive Director’s employment is conditional on his or her continued satisfactory performance and re-election by shareholders at each Annual General Meeting. A succession plan adopted by the Board provides for a tenure of six years on the Bank of Georgia Group Board. Upon the expiry of such six-year tenure, the Board will consider if the appointment of the relevant Non-Executive Director will generally cease at the next upcoming Annual General Meeting. Notwithstanding the foregoing, if the Board determines that, in order to maintain the balance of appropriate skills and experience required for the Board, it is important to retain a Non-Executive Director on the Board beyond the relevant six-year period, the Board may offer the Non-Executive Director a letter of appointment for an additional one-year term. Such a one-year “re-appointment” may be renewed no more than two times, with the effect that the usual six-year tenure may be extended to a maximum of nine years if circumstances were to warrant such extension. Remuneration Committee effectiveness review An internal effectiveness review was conducted by the Remuneration Committee. The evaluation addressed the structure and effectiveness of the Remuneration Committee and the performance evaluation process. The effectiveness evaluation concluded that the Remuneration Committee operates and performs effectively. Our priorities for 2019 include the implementation of the new Directors’ Remuneration Policy (subject to its approval by shareholders) and ensuring that the structure for senior management and other employees remains appropriate while enhancing long-term shareholder value. Implementation of Remuneration Policy for 2019 Details of how the revised Policy will be implemented for the 2019 financial year if approved by shareholders at the 2019 Annual General Meeting are set out below. Subject to shareholder approval, the Policy will take effect from the date of the 2019 Annual General Meeting and is intended to apply until the date of Annual General Meeting in 2022. 146 Annual Report 2018Bank of Georgia Group PLC