Compensation Policy

ÖZPANCAR İPLİK TEKSTİL Compensation Policy

Özpancar İplik Tekstil accepts and commits to comply with the principle of "equal pay for work of equal value" as defined by International Labour Organization (ILO) standards, Labor Law No. 4857, and the social compliance rules of the international brands we supply. With a competitive compensation policy, our aim is to attract talented individuals while maintaining high employee engagement and fostering a positive work environment.

When determining compensation and benefits, position requirements, internal company/team balance, and market data are considered.

Purpose
The purpose of the compensation policy is to formally define the procedures and principles that ensure alignment with corporate governance principles, company strategies, long-term goals, and production structure, while considering the legally mandated minimum wage. It aims to support company continuity, goal achievement, and employee welfare.

The policy is designed to attract, retain, reward, and motivate the workforce essential for sustainable success, while preventing practices or behaviors that could negatively impact customers, stakeholders, or the market, such as financial penalties or reputational loss.

Scope
The compensation policy applies to the Board of Directors, General Manager, Deputy General Managers, and all company employees.

Employees whose compensation is covered under a valid Collective Bargaining Agreement (CBA) are subject to the terms of the CBA. Any payments not regulated under the CBA, and all compensation and benefits for employees outside the CBA scope, are determined by this policy document.

Principles

Compensation: Salaries for Board members, senior management, and other personnel are aligned with company ethics, internal balance, and strategic objectives. All employees are compensated according to their responsibilities.
Sustainability: Compensation is structured considering environmental, social, and societal benefits.
Salary Components: Compensation consists of fixed and variable components. Fixed salary is determined based on professional experience, job scope, and responsibilities, covering regular wages, bonuses, and allowances. Variable pay includes cash or non-cash incentives based on performance or tenure. Fixed and variable components are balanced to avoid excessive risk-taking.
Equal Pay for Equal Work: Employees are paid within predefined salary ranges according to their role, responsibilities, and working hours. Salary ranges are reviewed each period.
Attendance Bonus: Employees receive attendance incentives based on work performance and continuity, excluding unpaid leave, arbitrary absences, or unauthorized leave.
Performance-Based Payments: Bonus payments consider performance for the relevant period and are not guaranteed in advance.
Confidentiality: Employee compensation and monetary payments are confidential. Violations are subject to disciplinary action.

Policy Determination
The compensation policy is a critical factor for employee engagement and performance improvement. When designing the policy to attract new talent and retain high-performing employees, the following are considered:

Internal Factors: Internal salary balance, budget, job responsibilities, individual performance, tenure, competencies, and compliance with internal/external regulations.
External Factors: Sector competitiveness, talent attraction, and external market data, including independent sector salary surveys.

Policy Implementation

Executive Compensation: Rights and salaries for the Board of Directors are determined by the Board, within the authority granted by the General Assembly, according to Corporate Governance Principles.
Salary Increases: Conducted annually, based on inflation, competitive benchmarks, sector position, and individual responsibilities to maintain purchasing power.
New Salary After Promotion or Role Change: Adjusted according to the employee’s new position within the salary grade.
Performance Bonus: Designed to increase effectiveness, maintain performance continuity, recognize top performers, and reward value-creating employees. Risk management factors, including credit, operational, regulatory, and reputational risks, are considered.
Other Payments: Occasional payments for events such as marriage or childbirth may be provided to boost motivation and engagement.
Fringe Benefits: Cash or in-kind benefits are provided based on job description, role level, authority, and budget.

Monitoring, Audit, and Reporting
The “Compensation Committee” monitors, audits, and reports on compensation implementation on behalf of the Board of Directors. The committee also reviews the policy annually and revises it if necessary.

All practices comply with applicable Turkish laws and regulations.

References:

ILO Equal Pay Convention: ILO Turkey Conventions

Labor Law No. 4857, Article 5: Mevzuat.gov.tr