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Contents Introduction Management report Appendices Corporate governance Consolidated Financial Statements Company Financial Statements
The deferred portion vests after three years if the conditions are
met, or after five years when rewarded to 'senior management'.
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% 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
or five 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 or five 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 variable remuneration is measured in
accordance with IAS 19 Employee benefits. 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 one
hundred thousand euros and both the immediate and the
deferred portion are paid fully in cash, which means that no
DRNs are awarded.
On 31 December 2017, the costs of equity instrument-based
payments were 14 (2016:13). On 31 December 2017, a liability
of 35 was recognised (2016: 30) of which 12 (2016:10) was
vested. The costs of variable remuneration paid in cash were
177 (2016:175).The number of DRNs outstanding is presented
in the following table.
in thousands 2017 2016
Opening balance 1,370 1,037
Awarded during the year 415 518
Paid during the year (353) (362)
Changes from previous year (20) 177
Closing balance 1,412 1,370
The value of a DRN is linked directly to the price of a Rabobank Certificate. The estimated payments to be made for the variable
remuneration are shown in the following table.
On 31 December 2017
Year of payment
in millions of euros
2018
2019
2020
2021
2022
Total
Variable remuneration, excluding DRNs
175.6
10.1
12.2
1.9
0.0
199.9
DRNs
11.6
12.0
9.7
10.6
1.8
45.8
Total
187.2
22.2
21.9
12.5
1.8
245.7
On 31 December2016
Year of payment
in millions of euros
2017
2018
2019
2020
2021
Total
Variable remuneration, excluding DRNs
173.3
6.7
8.4
9.9
198.3
DRNs
10.9
10.6
3.8
7.2
8.4
40.9
Total
184.2
17.3
12.2
17.1
8.4
239.2
Rabobank Annual Report 2017 - Consolidated financial statements
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