Remuneration Management Board

The remuneration policy for Management Board members is to provide a package that attracts and retains capable executives with relevant expertise in international finance. A specialized external consultant evaluates the compensation package at least every three years, using as reference data on executives from a number of financial institutions in the Netherlands and, when available, from abroad.

FMO applies a remuneration policy that takes into account all relevant input from its shareholders with reference to the changing common understanding and practice regarding remuneration issues in the financial sector, such as the Banking Code and evaluations of, and revisions to, the Dutch Corporate Governance Code. In order to adopt the changes presented in the Banking Code and the revisions to the Corporate Governance Code, an adjusted remuneration policy for the Management Board was drafted by the Supervisory Board, which was approved by the AGM in May 2011.

Remuneration elements

Remuneration elements include a fixed annual salary, performance-related pay, contribution to pension plan and other components. Members of the Management Board have no shares, options or loans relating to the company.

The total remuneration package for the job function is graded according to the Hay system. The total salary level is capped and related to two different referential peer groups: a (public/semi-) public sector reference group and a private sector reference group.  With regard to new labour contracts, the remuneration ceiling for the Chief Executive Officer is €300,000 gross salary per annum, subject to increases according to the General Banking Collective Labour Agreement as of May 2009. This yearly maximum compensation will include fixed salary, financial compensation for reduction of work hours, holiday allowance and any variable pay.

At the end of 2010, our advisor Hay Group conducted a study regarding the total remuneration package of the CEO in relation to the two referential peer groups. The conclusion of this study shows that the level of the remuneration package of the CEO is in line with our policy.

Fixed salary

The fixed salary component for all Management Board members has not increased since April 2009.

Performance-related pay

Performance-related pay is based on the financial and non-financial targets set annually, and is capped at a maximum of 25% of the fixed salary (outperformance). In the case of an 'at target' performance level, the performance-related pay is 15% of the fixed salary.

An important change approved by the AGM in May 2010 is that as of 2014 (transtitutional arrangements will apply up to and including 2013), a third of the variable pay of the Management Board will be paid out in the year of attribution and two-thirds three years later.

This remuneration component consists solely of short-term variable salary in the form of performance-related pay. Financial and non-financial targets are proposed to the Supervisory Board annually by the Selection, Appointment & Remuneration Committee, based on the budget of that year as approved by the Supervisory Board.

In 2011, financial targets related to business volume, value adjustments, operating expenses and profit before value adjustments and taxes. The Committee advises the Supervisory Board as to whether targets have been achieved and asks external auditors to verify the relevant calculations annually.

This also applies to the non-financial targets that are formulated each year. In 2011 these non-financial targets related to issues requiring special management attention during the reporting year, such as environmental and social impact, the percentage of investments in low-income countries, the percentage of implemented Environmental and Social Management System-related action items and customer satisfaction.

Pension scheme

All members of the Management Board have a pension scheme that is based on the average wage level arrangement, in accordance with the collective arrangement, that applies to all FMO employees.

Other components

Other employment benefits include a fixed expense allowance, social security, contribution to a company car, profit-sharing payment and compensation of interest on mortgages. All these arrangements are in line with the general fringe benefits within FMO.

The Management Board consists of three statutory members. Their remuneration for 2011 was €1,105,000  (2010: €1,122,000) and is specified in the table.

Remuneration of the Management Board (€x1,000)

 

Personal information

Fixed remuneration

Performance related pay 1)

Pension

Other 2)

Total 2011

Total 2010 3)

Nanno Kleiterp

Dutch, 1953, male

265

51

76

37

429

454

Nico Pijl

Dutch, 1951, male

202

39

63

51

355

335

Jurgen Rigterink

German, 1964, male

202

39

40

40

321

333

Total

 

669

129

179

128

1,105

1,122

1) The reported performance-related pay related to 2011 will be partly deferred in line with the guidelines on remuneration policies and practices.

2) Includes contributions to company car, fixed expense allowance, general profit-sharing, life-course savings scheme, compensation of interest on mortgages, compensation for the return of leave allowances and anniversary benefits. This is in line with the general fringe benefits within FMO.

3) Nico Pijl's fixed remuneration includes a six-week unpaid leave in 2010.

Performance related pay (%)

 

2011

2010

2009

2008 1)

Financial

8.8

10.3

9.7

8.1 (6.5)

Non-financial

10.5

11.9

6.2

8.1 (6.5)

Total (max 25%)

19.3

22.2

15.9

16.2 (13.0)

1) As of 2009, all Management Board members receive the same percentage of performance-related pay. The 2008 figures show the percentage of the CEO, followed by the percentage of the other members in brackets.