ING Direct 2004 Annual Report Download - page 60

REMUNERATION REPORT
(continued)
1.3
MANAGEMENT
AND GOVERNANCE
58 ING Group Annual Report 2004
REMUNERATION STRUCTURE EXECUTIVE BOARD 2005
Policy for 2005
With regard to the remuneration policy for 2005, the
Supervisory Board plans to build upon the new remuneration
policy initiated in 2003, further facilitating the movement
toward a more performance-oriented culture. The intention
is to continue the gradual convergence to the European
benchmark through a gradual increase in the short-term
and long-term incentive target levels (as a percentage of
base salary).
Base salary Executive Board 2005
The plan is to keep base-salary levels flat in 2005. A market-
competitiveness analysis will be conducted on an annual basis
to ensure market competitiveness.
Short-term incentive Executive Board 2005
Continuing with the intended focus on variable, performance-
related remuneration, the Supervisory Board has decided to
increase the short-term incentive at target to 75% of base
salary. The actual payout may vary between 0% and 200% of
the target level (e.g. between 0% and 150% of base salary).
The mix for the 2005 short-term incentive award will remain
the same as in 2003: 70% will be determined by pre-defined
ING Group financial performance measures and 30% will be
based on individual performance objectives set for each
Executive Board member and agreed by the Supervisory Board.
The Supervisory Board believes that for 2005, the Executive
Board’s short-term incentive award for the Group
performance should again be measured using the same
three financial criteria as in 2004: operating net profit,
total operating expenses and return on economic capital,
equally weighted. The targets set are challenging.
Long-term incentive Executive Board 2005
The Supervisory Board intends to set the nominal LTI target
value at 75% of base salary (same target percentage as the
STI). The range may vary between 50% and 150% of the
target level (e.g. between 37.5% and 112.5% of base salary).
The structure for the 2005 long-term incentive award will
remain the same as the 2003 structure (the total nominal
value at grant will be split between stock option and
performance shares).
As was the case in 2004, the total LTI value in stock options
and provisional performance shares to be granted to the
Executive Board members will be determined by the
Supervisory Board at the end of 2005, based on the
achievement of the three pre-defined financial objectives
set out in the 2005 short-term incentive plan.
REMUNERATION SUPERVISORY BOARD
Remuneration
In 2004, the remuneration of the members and former
members of the Supervisory Board amounted to EUR 0.5
million (2003: EUR 0.5 million; 2002: EUR 0.6 million). The
remuneration of the chairman amounted to EUR 68,100,
including EUR 6,810 expense allowances. Other members
received a remuneration of EUR 38,600, including EUR 2,270
expense allowances.
In view of the extra costs resulting from the wider and more
demanding range of tasks of the Audit Committee, the
Supervisory Board decided to raise the cost allowance for the
members of the Audit Committee from EUR 450 to EUR 1,500
per attended meeting. The cost allowance for the members
of the other committees is EUR 450 per attended meeting.
This cost allowance is in addition to a fixed annual
remuneration of EUR 1,360 for each committee member,
which remuneration is in addition to the remuneration
as a Supervisory Board member.
Loans and advances
As at 31 December 2004, the amount of loans and advances
outstanding to members of the Supervisory Board was
EUR 1.6 million at an average rate of 4.7%. This amount
concerns a loan to Aad Jacobs. No loans and advances were
outstanding to other members of the Supervisory Board.
As at 31 December 2003, the amount of loans and advances
outstanding to members of the Supervisory Board was
EUR 1.8 million at an average rate of 4.7%. This amount
concerned a loan to Aad Jacobs of EUR 1.6 million at an average
rate of 4.7% and a loan to Paul Baron de Meester of EUR 0.2
million at an average rate of 4.8%. No loans and advances
were outstanding to other members of the Supervisory Board.