principles underlying the remuneration policy, as set out in the Vision on Remuneration
published in 2010. In addition, Rabobank is pursuing its own, relatively moderate policy on
setting pay.
The GRP applies to the whole of Rabobank Group in the Netherlands and in other countries.
It was prepared in line with the requirements set by the European Capital Requirements
Directive (CRDIII) regarding restrained remuneration in the financial sector. In the Netherlands,
these requirements are enshrined in law in the Restrained Remuneration Policy (Financial
Supervision Act) Decree and the Regulations on Restrained Remuneration Policy (Financial
Supervision Act) 2011Under the new policy, a number of practices are prohibited in respect of
Rabobank Group employees, the most important of which is that variable pay may no longer
be guaranteed. The new policy also gives the Supervisory Board of Rabobank Nederland the
possibility of deciding that no variable pay is to be paid out if this were to adversely affect the
robustness of Rabobank Group and its ability to continue as a going concern in the long term.
In addition, specific rules apply to setting variable pay for Identified Staff (employees who
could have a material impact on Rabobank's risk profile owing to their position) and employees
in monitoring positions (Risk Management, FIR, Control, ARG and Compliance), in accordance
with the aforementioned legislation and regulations.
All employees
Identified Staff
Employees in monitoring
positions
General ban on awarding
guaranteed bonuses
Three levels of performance
targets: Rabobank Group, group
entity and individual
Maximum of 50% of perfor
mance targets to be financial
targets
At least 70% of performance
targets to be job-specific
No financial objectives at the
level of employee's own
monitoring role, to safeguard
independence.
Claw-back of bonuses paid
previously in the event of fraud
and/or inaccurate information
Significant portion of variable
pay (at least 50%) to be deferred
for three years, with the deferred
portion subject to ex-ante and
ex-post risk tests
General ban on discretionary
pension commitments and
hedging strategies relating to
variable pay
50% of total variable pay to be
paid out in the form of financial
instruments whose value is
linked to the price of Rabobank
Member Certificates
The annual appraisal and remuneration cycle, including the defining and measuring of
performance targets, is designed to ensure that the right targets are chosen to increase
customer focus and care and shore up the robustness of the organisation and its ability to
continue as a going concern in the long term. The introduction of the GRP has reinforced
Rabobank's governance structure in a number of areas, for example with regard to group-wide
supervision by the Supervisory Board and the Executive Board of the awarding and payment of
variable pay to Identified Staff. In addition, monitoring committees have been established at all
group entities and subsidiaries. These committees are responsible for conducting risk tests of
the overall and individual variable pay of Identified Staff and advising the Supervisory Board
on the approval of such variable pay. The tests are designed to reduce the risks associated with
variable pay and at the same time remove any undesirable incentives.
86
Annual Report 2011 Rabobank Group
