Contents Management report Corporate governance Consolidated financial statements Financial statements Pillar 3
Group Remuneration Policy
The principles and guidelines of the Vision on Remuneration are
detailed in the Group Remuneration Policy.The requirements
under external legislation and regulations are also enshrined in
this policy, including the Financial Undertakings Remuneration
Policy Act (Wbfo), the Regulations on Restrained Remuneration
Policies, the Capital Requirements Directive IV (CRD IV) and the
Dutch Banking Code.
The Group Remuneration Policy applies to Rabobank Group as
a whole. The boards of the subsidiaries (DLL, Rabo Real Estate
Group, Obvion) are responsible for adopting and implementing
a remuneration policy in line with the Vision on Remuneration
and the Group Remuneration Policy.The remuneration policies
for local Rabo banks are set by the Rabobank Nederland
Executive Board.The Supervisory Boards of local Rabobanks
monitor the execution of Rabobank's remuneration policies in
local Rabobanks.
The Group Remuneration Policy is in line with Rabobank
Group's business strategy, core values and desired risk profile.
It supports solid and effective risk-management processes and
discourages employees from taking undesirable risks. At the
same time, it enables Rabobank to hire and retain appropriately
qualified employees. It also encourages employees to aim
for lasting results in line with the long-term interests of both
Rabobank Group and its clients.
Variable remuneration
The large majority of Rabobank employees do not receive
variable remuneration. In 2013, variable income was rescinded
in the CLA and for the Executive Board. In 2014, variable pay for
executives was likewise eliminated.
However, certain groups of employees, primarily within the
Wholesale, Rural Retail domain, DLL and Rabo Real Estate
Group, continue to be eligible for variable remuneration.
In 2015,4% of total remuneration was variable, which boils
down to EUR 195.8 million for Rabobank Group worldwide.
The risk-controlling measures below apply to employees with
variable remuneration.
Maximisation of variable remuneration
Wherever variable remuneration still applies, a maximum
is imposed. In the Netherlands, on average, any variable
remuneration must not exceed 20% of an employee's
fixed income.
Deferred variable remuneration
A deferral policy applies to variable remuneration, which means
a portion is paid on a deferred basis.The deferred payment
covers a sufficient period of time, of at least three years, to allow
the ex-post test to be performed.
Balanced mix of performance targets
In performance management, client interests come first.
Rabobank's performance objectives do not contain any stimuli
that encourage sloppy behaviour or behaviour that is not in
the clients' best interest. Instead, Rabobank's performance
objectives constitute a balanced entity of financial and non-
financial criteria. At least half ofthe performance objectives
comprise non-financial objectives.
Ex-ante test
On an annual basis, the Executive Board verifies whether
payment ofthe proposed variable remuneration is responsible,
based on Rabobank Group's qualifying capital and solvency
ratio. This 'ex-ante'test therefore centres on the question of
whether Rabobank is able to make the payments without any
resulting financial problems. Subsequently, the test is submitted
for approval to the Supervisory Board.
Ex-post test
Before deferred amounts and amounts awarded on
a conditional basis are released and awarded unconditionally
by the bank, they are tested to see if there is any reason to
downgrade the amounts.This test centres on the question
of whetherthe award ofthe variable remuneration is still
justifiable, even in the light of what we know today.
Claw back
In special cases, Rabobank can withdraw an awarded sum with
retroactive effect.This is called 'claw back'. Rabobank Group is
authorised to reclaim all or a portion of variable remuneration
from both employees and former employees in the following
cases:
Payment was made based on inaccurate or misleading
information regarding the achievement ofthe performance
targets or the conditions on which the variable remuneration
was made dependent.
The employee concerned has been found guilty of fraud.
The employee has participated in, or been responsible for,
behaviours that have resulted in substantial losses and/or
damage to the bank's reputation.
The employee has failed to satisfy the relevant standards for
competence and appropriate conduct.
102 Rabobank Annual Report 2015
