Changes approved for the 2010 financial year as a consequence of the Act on the Adequacy of Management Board Remuneration
With an eye to § 87 Para. 1 Stock Corporation Act as amended by the Act on the Adequacy of Management Board Remuneration, the full Supervisory Board undertook for the first time a review of the fixed emoluments of individual members of the Executive Board. In view of the changes in the legal situation, the profit bonuses for the members of the Executive Board were also restructured and the conditions of the stock option plan applicable to the Executive Board were adjusted to reflect the new legal framework.
| Structure and system of Executive Board remuneration with effect from 1 January 2010 | |||
|---|---|---|---|
| Component | Assessment basis / parameter | Condition of payment | Paid out |
| Basic remuneration, non-cash remuneration, fringe benefits | |||
| Basic remuneration Non-cash remuneration /fringe benefits (company car, insurance) |
Function Responsibility Length of service on the Executive Board |
Contractual stipulations | Monthly |
| Short-term remuneration components | |||
| Performance bonus | Individual contribution to the overall performance Leadership skills Innovative skills Entrepreneurial skills Accomplishment of personal objectives |
Accomplishment of objectives | Annually in following year |
| Medium-term remuneration components | |||
| Profit bonus | Earnings per share (EPS), calculated on a rolling three-year average, x individual EPS basic amount (graduated according to area of responsibility and professional experience), limited to at most 1.5 times the average target EPS of the last three financial year | Contractual stipulations | Annually in following year |
| Stock option plan | |||
| Long-term incentive plan (stock appreciation rights) | Internal performance criterion (target performance defined by the Supervisory Board, expressed in “diluted earnings per share” according to IAS 33) External performance criterion (movement in the share price in the allocation year relative to the ABN Amro Global Reinsurance Index) |
Exercise of ABR | In the fifth year after the end of the allocation year (“maximal”60%), “maximal” 20% each in the sixth and seventh years |
| Retirement provision | |||
| Pension entitlement | Basic remuneration Years of service on the Executive Board |
Retirement, insured event, premature termination or non-extension of employment contract under certain circumstances | – |
At its meeting on 4 November 2009 the Supervisory Board considered the restructuring of the profit bonus. Among other things, the calculation of the “Earnings per Share (EPS)” on a rolling three-year average, the capping of the profit bonus to a maximum 1.5 times the average target EPS of the last three financial years and the elimination of the guaranteed portion of the profit bonus were decided upon for the 2010 financial year.
In addition, at the same meeting the Supervisory Board decided to extend the waiting period from two to four years for the Executive Board with respect to stock appreciation rights granted from the 2010 allocation year onwards. Upon expiry of this waiting period a maximum 60 percent of the stock appreciation rights granted for an allocation year may be exercised. The waiting period for a further 20 percent of the stock appreciation rights awarded for this allocation year is another year. Stock appreciation rights that have not been exercised lapse once ten years have passed since the date of allocation.
The table here summarises the future structure of the Executive Board's remuneration.