2010, a group framework came into effect that describes Rabobank Group's policy on the
product approval process and focuses on safeguarding product quality. Standards also apply
to product approval procedures and their organisation, as well as to individual product testing
by group entities. In this way, Rabobank is taking responsibility for its relationship with its
customers and for the level of quality it offers. Rabobank Group Audit checks whether the
product approval has been designed properly, is present and is working effectively.
Audit
Rabobank complies with all of the provisions of the Banking Code relating to audits.
Remuneration
The Banking Code contains principles for a prudent, restrained and sustainable remuneration
policy that incorporates non-financial performance criteria. The rules governing remuneration
policy focus on the long-term and on the avoidance of unwanted incentives with regard to
risk. Rabobank endorses these guiding principles. In 2010, a number of procedures were
revised and tightened to improve safeguards in this area further.
Taking its cooperative identity as a starting point, Rabobank drew up a Vision on Remuneration
to ensure that the guiding principles that have been adopted are meticulously applied by
group entities. The Vision on Remuneration therefore also covers the remuneration of the
directors of local Rabobanks. In addition, existing regulations and procedures were tightened
where necessary.
Each year, the remuneration paid to the members of Rabobank Nederland's Executive Board
is subject to an independent benchmark. Previous benchmarks, including the one performed
in January 2010, showed that their remuneration is below the median of the peer group.
The executive directors' variable pay is relatively low, both compared to their fixed income
and to the market. The variable pay is based on a set of quantitative and qualitative targets,
and includes both long-term and short-term elements, each of which is up to 15% of their
fixed salary.
Parts of the rules of procedure for the Supervisory Board and the Remuneration Committee
(which is responsible for drawing up remuneration policy) were amended in early 2010 to
ensure compliance with the Banking Code. This means, among other things, that the
Supervisory Board approves the remuneration policy for senior management and monitors
its implementation by the Executive Board.
Material retention, exit and welcome packages are not permitted in principle. Any exceptions
are subject to Executive Board approval. The Supervisory Board discusses the highest earners
based on a group-wide remuneration report.
Members of the Executive Board appointed prior to 1 January 2010 receive severance pay
based on the subdistrict court formula in the event of their removal. This entitlement to
severance pay was laid down in agreements made previously with the relevant members
of the Executive Board and therefore constitutes a departure from the relevant provision of
the Banking Code. The Banking Code principle on severance pay will be complied with in
the case of new members of the Executive Board.
Overview provisions Banking Code
The guiding principles of the Banking Code are self-evident to Rabobank. It welcomes
the Banking Code and put a great deal of energy into its implementation in 2010. Further
information concerning the particulars of each provision can be found in a separate appendix
to this Annual Report that is available on www.rabobank.com/annualreports.
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Annual Report 2010 Rabobank Group