Contents Foreword Management report Corporate governance
Consolidated Financial Statements
Company Financial Statements
Pillar 3
In addition to these risk-management measures, the following
general prohibitions also apply:
It is not possible to award guaranteed variable remuneration
to employees.1
Personal hedging strategies are not permitted under any
circumstances whatsoever.
A severance payment must reflect the quality of
an employee's performance. Employees will not be rewarded
for failure or misconduct.
In the event that the termination of the employment
relationship was initiated by the employee, no severance
pay will be awarded, unless this termination is the result of
serious imputable acts or culpable omissions committed by
the employer.
Identified Staff
The Executive Board has identified a number of positions
as 'Identified Staff'. These are positions that could have
a significant impact on Rabobank's risk profile. Over four
hundred employees hold such positions across all entities
of Rabobank Group, with only a portion eligible for variable
remuneration under strict rules to minimise the risks involved.
The most important of these risk-mitigating measures include
a balanced mix of performance targets, deferred variable
remuneration and deferred remuneration notes.
Balanced mix of performance targets
As is the case for all other employees, Identified Staff must
have a proper balance of performance objectives. Any variable
remuneration is awarded based on a minimum of 50 percent
non-financial objectives.
Deferred variable remuneration and Deferred
Remuneration Notes
A minimum of 50% of the variable remuneration for eligible
Identified Staff is awarded conditionally and paid on a deferred
basis after a period of at least three years. This group receives
half of the variable remuneration in the form of Deferred
Remuneration Notes (DRNs), which are linked directly to the
price of Rabobank Certificates. A retention period of one year
applies to DRNs awarded unconditionally. This means that
payments are made on DRNs one year after they have vested.
The Executive Board can withdraw or reclaim this variable
remuneration in accordance with the applicable legislation
and regulations.
Performance Management
In our view, achieving Rabobank's strategic objectives
demands effective management, coaching and feedback for
our employees. Performance Management (PM) is an ongoing
series of conversations between manager and employee aimed
at ensuring employees' contribution to overall business targets,
and empowering employees to play an active role in their own
development. PM is therefore not just about evaluating past
performance, but also about discussing potential for further
development.
Customer's interest
In PM, customers' interests come first. Managers and staff reach
mutual agreements on the results and competency targets to
be achieved, which must contain no incentives that may lead
to behaviour that is careless or not in the customer's interest.
The targets set constitute a balanced mix of financial and non-
financial criteria. Under competencies, 'customer focus' and
'collaboration' are compulsory.
Redesigned process
PM was introduced at the same time with variable income, but
the current process and system no longer suit Rabobank's goal
of being a high-performance organisation for its customers.
The annual objectives were not allowing us to respond quickly
enough to the pace of real-world change, and recording
all agreements requires a simple system. Therefore, PM was
redesigned in 2016.
The new process focuses on employee growth and is based on
ongoing dialogue between managers and employees regarding
the employees' contribution to the organisation's objectives,
their conduct and development. Meaningful conversations
between managers and employees and their colleagues help
employees become aware of their own and each other's
qualities. Feedback forms part of these interviews which are
held in a constructive and energising atmosphere, empowering
employees and realising the high-performance bank that we
aim to be for our customers. Due to the focus on growth - for
employees, customers and the bank alike - the name of the
new PM is GROW!. It was launched 1 January 2017 and applies
to all employees within the bank, in the Netherlands and also
the international departments of Wholesale, Rural Retail.
1 Awarding compensation for the discontinuation of (deferred) variable remuneration an employee received from a previous employer is only
possible when recruiting new employees, and only for the first year of employment. The full cycle of risk management is applied in this process.
106 Rabobank Annual Report 2016
