PautaInternas
Actions
buscador
Actions
Compensation
Actions
Compensation
May 21, 2021
At Ecopetrol we have a Compensation Policy that ensures working conditions that encourage our workers to give the Company their maximum commitment and potential; aiming for the attraction and loyalty of the human resource required for the development of the strategy.
The main components of total compensation at Ecopetrol are:
-
Fixed Compensation: It provides monetary considerations for the performance of the functions associated with the position of each worker and is made up of salaries, legal and extralegal benefits.
-
Benefits: have the goal of contributing to the quality of life of our workers, and are mainly oriented to the areas of health, education, loans, savings, and insurance.
-
Variable compensation: Variable compensation is paid based on Company’s results and individual performance and serves to align employees with annual business objectives which are measured by the Balanced Score Card of Ecopetrol Group (TBG GE). This variable element of compensation is determined and assigned considering factors such as the result of financial and management indicators, HSE effects, environmental, ethical and disciplinary events, internal control failures, and individual performance of each of the employees.
-
Long Term Incentives (LTIs): Long Term Incentives are a vehicle to encourage the achievement of strategic objectives, to guarantee the sustainability of the company, to line up the leaders with the interest of our shareholders, and to promote cooperation in the management team. In January 2020, the Board of Directors approved the first Long-Term Incentive Plan for the 2020 – 2022 period, and since then we have released one long term incentive plan every year, to promote the reciprocal generation of value for the Ecopetrol Group, for its shareholders and for the management. The participants of LTIs Plans are the senior management and other managers with exceptional performance.
CEO Compensation
The remuneration policy of the CEO supports the achievement of the goals set in the Company’s Balance Scorecard (TBG for its acronym in Spanish) through a balance use of performance measures in the short- and long-term incentive systems. This variable incentive plans linked to measurable and predetermined, includes prioritized financial and non-financial targets, consistent with the Strategic Plan of Ecopetrol.
During 2022, the Balanced Scorecard indicators were grouped into five strategic drivers:
-
Life first (10%)
-
Grow with Energy Transition (45%)
-
Competitive Returns (30%):
-
TESG1 (10%)
-
Cutting- Edge- Knowledge (15%):
Payment of variable compensation for all employees is subject to the approval of the Board of Directors. It seeks to recognize and encourage the achievement of business results, all the while aligning individual efforts to achieve the common goal through the individual contribution of all employees.
The variable compensation for results is reviewed between January and April of the following year, once corporate results are published, and at the end of the evaluation process for individual performance for the previous period.
Long-Term Incentives (LTIs) are recognized to the CEO based on long-term business results (three years) that guarantee the sustainability of the Company. Currently, three plans are running for the periods of 2020-2022,2021-2023 and 2022-2024.
The objectives set for the LTI 2020 - 2022, 2021 - 2023 and 2022 - 2024 are associated with the generation of value and the energy transition through the reduction of the carbon footprint, the diversification of low-emission businesses, the growth of the production of equivalent crude oil, the replacement of reserves; strategic objectives for the sustainability of Ecopetrol and the country's energy sovereignty.
