37 Staff costs
Contents Management report Corporate governance Consolidated financial statements Financial statements Pillar 3
in millions of euros
2015
2014
Wages and salaries
3,194
3,331
Social security contributions and insurance costs
394
424
Pension costs - defined contribution plans
500
532
Pension costs - defined benefit pension plans
9
32
Other post-employment provisions
(65)
54
Other staff costs
754
713
Total staff costs
4,786
5,086
Expressed in FTEs, the average number of internal and
external employees in Rabobank during the year was 52,885
(2014: 58,408).
In 2011, following the implementation of CRD III and the
regulations governing restrained remuneration policy,
Rabobank Group adopted an amended remuneration policy:
the Group Remuneration Policy.This policy is updated on
a regular basis and has, as of 1 January 2015, been adjusted to
include the provisions under the Dutch Act on Remuneration
Policies for Financial Companies. Insofar as employees in
the Netherlands are still eligible for variable remuneration,
it never amounts to more than (on average over group
employees) 20% of the fixed income. Outside the Netherlands,
any variable remuneration never amounts to more than 100%
of the fixed income. Insofar as identified staff (employees who
can have a material influence on the risk profile of tRabobank
Group) are eligible for variable remuneration, it is awarded for
such a period that the risks associated with the underlying
business activities are adequately taken into account. Payment
of a significant portion of variable remuneration is therefore
deferred. The immediate portion of variable remuneration is
unconditional, whereas the deferred portion is conditional.
The deferred portion vests after three years if the conditions are
met. Among other things, it is assessed whether there has been
a significant reduction in financial performance or a significant
change in risk management at Rabobank Group and/or
business unit that puts the circumstances assessed when the
relevant variable remuneration was awarded in a different
perspective. In principle, the right to any provisionally allocated
remuneration lapses when the staff member's employment ends.
50% percent of both the direct and the deferred portion of the
variable remuneration is allocated in cash.The cash component
of the direct portion is immediately awarded following allocation.
The cash component of the deferred portion is awarded to
employees only after vesting (after a period of three years).
50% of the direct and the deferred portion of the variable
remuneration is allocated in the form of an instrument
(instrument component) i.e. the Deferred Remuneration
Note (DRN).The value of a DRN is linked directly to the price
of a Rabobank Certificate (RC) as listed on the NYSE Euronext.
The instrument component is converted into DRNs at the
time of allocation on completion of the performance year.
The number of DRNs is determined on the basis of the closing
rates for Rabobank Certificates, as traded on the NYSE Euronext
during the first five trading days of February of each year.
This therefore represents both the instrument component
of the direct and the deferred portion of the variable
remuneration.The final number of DRNs relating to the deferred
portion is established on vesting (after a period of three years).
The payment of the instrument component is subject to a one
year retention period. After the end of the retention period,
the employee receives, for each DRN (or a portion thereof)
an amount in cash that corresponds with the value of the DRN
at that moment.
Payment of the cash component of the variable remuneration
is measured in accordance with IAS 19 Employee benefits,
whereas payment of the DRNs is measured in accordance
with IFRS 2 Share based payments.The immediate portion of
the variable remuneration is recognised in the performance
year, whereas the deferred portion is recognised in the years
before vesting.
The same system also applies, in broad terms, to non-identified
staff, although no deferral policy applies to the first 100,000 and
both the immediate and the deferred portion are paid fully in
cash, which means that no DRNs are awarded.
On 31 December 2015, the costs of equity instrument-
based payments were 8 (2014:10). On 31 December 2015,
a liability of 26 was recognised (2014:23). The costs of variable
remuneration paid in cash were 91 (2014: 97). The number of
DRNs outstanding is presented in the following table.
in thousands 2015 2014
Opening balance 1,014 952
Awarded during the year 249 348
Paid during the year (126) (166)
Changes from previous year (100) (120)
Closing balance 1,037 1,014
237 Notes to the consolidated financial statements
