Remuneration policy

In 2009, the new general assumptions for the remuneration policy of Van Lanschot were approved by the Board of Managing Directors and the Supervisory Board. The Employees’ Council also approved these assumptions.

When preparing the remuneration policy, account has been taken of the Banking Code, ‘The principles for controlled remuneration policy’ as presented by the Dutch Central Bank and the Netherlands Authority for the Financial Markets (AFM) on 6 May 2009 (‘the DNB and AFM principles’) and the good practices as included in an appendix to the relevant report of the Dutch Central Bank of September 2009 (‘Good Practices of the DNB’)*.

On 6 May 2010, the Annual General Meeting of Shareholders of Van Lanschot NV was extensively informed about the proposal to adopt a new remuneration policy for the Board of Managing Directors. On this same date, the Meeting adopted this new remuneration policy for the Board of Managing Directors.

The new remuneration policy for other Van Lanschot employees was approved by the Board of Managing Directors. The Supervisory Board approved the principles underlying the remuneration policy. The new remuneration policy was also approved by the Employees’ Council. The new remuneration policy for employees came into effect on 1 January 2010.

The structure of the new remuneration policy was adjusted in 2011 to fall into line with the new statutory provisions. The Regulation on Sound Remuneration Policies pursuant to the Dutch Financial Supervision Act 2011, as adopted by the Dutch Central Bank, has been in effect since 1 January 2011. As a result of these new rules, the structure of the remuneration policy for the members of the Board of Managing Directors, which was adopted by the shareholders’ meeting in 2010, was revised in some respects. These changes relate to the structure only, with the existing policy otherwise remaining intact, including its key principles and remuneration levels. The changes were adopted in the Annual General Meeting of 11 May 2011.

Details of these changes in remuneration policy can be found at General Meeting of Shareholders.

Van Lanschot’s remuneration policy complies with the principles of the Banking Code taking the following into account:

a. The total direct compensation of the members of the Board of Managing Directors is in line with the median level if performance is on target (provision 6.3.1 of the Banking Code). In the Annual General Meeting of Shareholders of 11 May 2011 it was explained that the total direct compensation for the Chairman’s performance on target and for maximum performance declined 25% and 27% respectively. The Supervisory Board believed this to be the maximum possible reduction of this remuneration. Moreover, the Supervisory Board thinks it is important to have a certain correlation between the remuneration of the Chairman and that of the other members of the Board of Managing Directors. In addition, the Supervisory Board believes that it is desirable that the total direct compensation is slightly above the median in view of continuity and the related retention objective.

b. The compensation payable to the Chairman of the Board of Managing Directors in the event of his involuntary termination is two years’ fixed annual salary instead of one year’s fixed annual salary (provision 6.3.2 of the Banking Code). When the employment contract with the Chairman was signed in 2004, account was taken of his employment record at his previous employer. The Supervisory Board thought that it was too large a step to reduce the compensation in one go to one year’s fixed annual salary. That is why this compensation was reduced to two years’ fixed annual salary in the adjustment of the remuneration policy in 2010. The compensation will be reduced to one year’s fixed annual salary on the proposed reappointment of the Chairman on 1 January 2012. This gradual reduction was discussed in the Annual General Meeting of Shareholders on 6 May 2010. This deviation from provision 6.3.2 of the Banking Code will therefore no longer apply on the proposed reappointment of the Chairman of the Board of Managing Directors on 1 January 2012.

c. On payment of the variable pay to the members of the Board of Managing Directors, a corresponding number of shares (from that part of the pay awarded in the form of shares) may be sold by way of compensation for the payroll tax payable. This is in deviation of provision 6.3.4 of the Banking Code. After payment in the form of shares has been made (when the shares become unconditional after three years), the shares need to be held for a further period of at least two years. The total period after which a member of the Board of Managing Directors has the shares at his disposal is therefore at least five years, which is in compliance with provision 6.3.4 of the Banking Code.
 

Footnote

* The principles for controlled remuneration policy as presented by the Dutch Central Bank and the Netherlands Authority for the Financial Markets (AFM) and the relevant report of the Dutch Central Bank of September 2009 can be downloaded from the website: www.dnb.nl.