Contents Foreword Management report Corporate governance
Consolidated Financial Statements
Company Financial Statements
Pillar 3
Group Remuneration Policy
The principles and guidelines of the Vision on Remuneration are
detailed in the GRP. The requirements under external legislation
and regulations are also enshrined in this policy, including the
Dutch law Wbfo1, the Regulations on Restrained Remuneration
Policies, the Capital Requirements Directive IV (CRD IV) and the
Dutch Banking Code.
The GRP is subject to annual review, and applies to the entire
Rabobank Group. The boards of the subsidiaries (DLL, Rabo Real
Estate Group and Obvion) are responsible for adopting and
implementing a remuneration policy in line with the Vision on
Remuneration and the GRP.
The GRP complies with Rabobank Group's business strategy,
customer focus, core values and desired risk profile. The policy
supports solid and effective risk-management processes
designed to protect Rabobank's long-term results and bolster its
robust capital position, while also raising employees' awareness
of risks and discouraging taking undesirable risks (e.g.
irresponsible sales practices). 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 Rabobank Group, its clients and
other stakeholders.
Variable remuneration
The large majority of Rabobank employees do not receive
variable remuneration. Variable income was removed from the
CLA and abolished for the Executive Board in 2013, and for
other executives in 2014. 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 2016, 5% of total remuneration was
variable, which boils down to EUR 210 million for Rabobank
Group worldwide.
Our remuneration policy must contribute to management and
employees making the right considerations in terms of risks.
We have the following risk-controlling measures that apply to
employees with variable remuneration:
Capping of variable remuneration
Wherever variable remuneration still applies, a cap has been
imposed. In the Netherlands, any variable remuneration must
not exceed 20% on average. Outside the Netherlands the
maximum is 100%.
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, at least three years, to allow
the ex-post test to be performed.
Balanced mix of performance targets
Rabobank's performance objectives do not contain any
incentives that might encourage behaviour that is careless or
otherwise not in the clients' best interest. Our performance
objectives consist of well-balanced financial and non-financial
criteria. At least half of the performance objectives must be
non-financial.
Ex-ante test
On an annual basis, the Executive Board verifies whether
payment of the 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 can pay the variable remuneration without
causing financial problems.
Ex-post test
Before the bank releases deferred amounts and amounts
awarded on a conditional basis, they are tested to see if there is
any reason to downgrade the amounts before awarding them
unconditionally (malus). This test centres on the question of
whether the award of the variable remuneration is, in light of
the latest information, still justifiable.
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 of the performance
targets or the conditions on which the variable remuneration
was made dependent.
The employee concerned has engaged in fraudulent conduct.
The employee has participated in, or been responsible for,
conduct that has 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.
1 Wbfo; Wbfo is an amendment and an addition to the Dutch law
Wet op het Financieel Toezicht, Wft.
105 Our output and impact: responsible remuneration
