Remuneration policy
Re-appointment of external auditor
On the recommendation of the ACRC, the Supervisory Board decided in 2012 to nominate
the external auditor for re-appointment to the General Meeting for the audit years 2013,
2014 and 2015. The General Meeting passed a resolution to re-appoint the external auditor
on 14June 2012.
Sustainability
The Supervisory Board attaches great value to Rabobank's focus on its customers and its
commitment to society, and is acutely aware of the responsibility that comes with delivering on
this promise and being a sustainable bank in the broadest sense of the word. The Cooperative
Affairs Committee took an advisory role in the reporting period in reviewing several
sustainability-related issues and exchanging ideas about these issues with the Executive
Board. Sustainability also came up for discussion in several plenary meetings between the
Supervisory Board and the Executive Board. The Supervisory Board is happy that corporate
social responsibility continued to be embedded in Rabobank's service provision in 2012,
which was declared the International Year of Cooperatives by the United Nations.
Rabobank pursues a prudent, restrained and sustainable remuneration policy. To find out more
about the Group Remuneration Policy, please consult the section on employees elsewhere in
this Annual Report.
The Supervisory Board approves the remuneration policy for senior management and
supervises its execution by the Executive Board. In the context of risk management and in
order to put into practice the principle of'pay for performance, not for failure', employees are
not automatically awarded variable pay. New recruits can be awarded a welcome bonus, for
their first year only, to compensate for lost bonuses, deferred or otherwise, from their former
employer. Any welcome bonus is subject to the full risk alignment cycle. Severance pay is to
reflect the performance of employees, rather than rewarding them for failure. Material
exceptions to the Group Remuneration Policy are subject to the prior consent of the Executive
Board and the Supervisory Board. The Supervisory Board discusses the highest earners every
year via a group remuneration report.
Rabobank offers no variable pay in the form of option or shareholding rights that are awarded
to executive directors or senior management. Fifty percent of the variable pay of Identified
Staff (employees who have a significant impact on the bank's risk profile) is, however, awarded
in the form of a Deferred Remuneration Note (DRN). This is in keeping with the relevant rules
and regulations. The value of the DRN is linked to the price of the Rabobank Member
Certificates on a one-to-one basis. The remuneration of the members of the Executive Board
is benchmarked every year. This benchmark shows that the remuneration is relatively modest.
The Executive Board members'variable pay is limited, both compared to their basic pay and
to the market. The variable pay is based on a number of quantitative, qualitative, individual
and collective targets to be achieved in the long and short term. The variable pay of the
members of the Executive Board is no more than 30% of their basic pay. It has been decided
not to award variable pay for 2012. At least 60% of the variable pay is initially awarded on a
conditional basis, only to vest after three years. A number of highly specialised employees at
Rabobank International and subsidiaries with foreign operations only are awarded higher
variable pay; they are governed by the same vesting scheme as that in effect for the Executive
Board. This procedure is in keeping with the remuneration practices that are commonly used
for these types of employees worldwide. Rabobank does not currently have a remuneration
structure that might trigger irresponsible risk-taking, nor has it had such a remuneration
structure in the past.
Executive remuneration
Rabobank's cooperative identity and structure are embedded in its remuneration policy for
the members of the Executive Board. As part of the remuneration policy for the Executive
Board formulated by the Central Delegates Assembly, which is in keeping with the Vision of
Remuneration and the Group Remuneration Policy, the Supervisory Board determined the
performance-related pay for each member of the Executive Board on the basis of their
performance appraisal in 2011After having been reviewed by the Supervisory Board, the full
remuneration report 2011 was discussed with the Confidential Committee of the Central
Delegates Assembly, which shared its comments on the report with the Central Delegates
Assembly representing the members of Rabobank Nederland. The total pay of each member
102 Annual Report 2012 Rabobank Group
