ING Direct 2011 Annual Report Download - page 83

1 Who we are 2 Report of the Executive Board 3 Corporate governance 4 Consolidated annual accounts 5 Parent company annual accounts 6 Other information 7 Additional information
Should it become clear, after such evaluation, that the new
remuneration policy has led to an unintended or inequitable
outcome, the Supervisory Board will have the discretion to correct
the previously allocated variable remuneration. However, it is
understood that any such correction could not lead to a deviation
from the requirement that variable remuneration cannot exceed
100% of base salary during any year, as required under the Dutch
Banking Code or be in violation of the Capital Requirements
Directive III.
The remuneration policy is leading in the international financial
markets in terms of moderation of pay. The Supervisory Board and
the Executive Board also have an obligation to safeguard the
continuity of the company. The Supervisory Board will therefore
evaluate from time to time how these two responsibilities relate
toeach other. If and when appropriate,
it can make adjustments.
2011 REMUNERATION
ONGOING PUBLIC DEBATE REGARDING REMUNERATION
Remuneration at ING is a topic of heated debate, particularly in the
Netherlands. In 2011, following public discussion in the Netherlands
after the Remuneration Committee had awarded the Executive
Board of ING Group variable remuneration in relation to their 2010
performance, the members of the Executive Board decided not to
accept this variable portion of their total direct compensation.
Furthermore, they announced not to accept the proposed 2011
salary increase and any variable remuneration until the core Tier 1
securities that were issued to the Dutch State have been fully repaid
even though the proposed salary increase and variable
remuneration were in line with the remuneration policy as
approved by the AGM in 2010.
The Supervisory Board regrets that it underestimated the signal that
was sent to Dutch society by awarding the Executive Board variable
remuneration and is keen on ensuring that remuneration at ING
does not become the subject of public debate again. However,
while the gesture made by the Executive Board members was
appreciated by the public and the Supervisory Board, this does not
solve the ongoing dilemmas faced by the Supervisory Board in
general and the Remuneration Committee in particular.
It is the Remuneration Committee’s responsibility to take the
interests of all stakeholders, including shareholders and the global
employee population into account, as well as business continuity
when overseeing a company-wide remuneration policy and
executing the Executive Board remuneration policy.
Members of the Executive Board will be required to pay a
contribution to their pension premium in line with the contributions
under ING’s Collective Labour Agreement in the Netherlands.
Members of the Executive Board working on a non-Dutch
employment contract will be offered pensions in line with
localpractices.
Benefits
Executive Board members will continue to be eligible for a range of
additional benefits (e.g. the use of company cars, contributions to
company savings plans and, if applicable, expatriate allowances).
Executive Board members may obtain banking and insurance services
from ING Group subsidiaries in the ordinary course of their business
and on terms that apply to most other comparable employees of
ING. In addition, tax and financial planning services will be provided
to ensure compliance with the relevant legislative requirements.
Tenure
The contract of employment for Executive Board members provides
for an appointment for a period of four years and allows for
reappointment by the General Meeting. In the case of an
involuntary exit, Executive Board members are eligible for an
exit-arrangement limited to one-year base salary.
OTHER ITEMS FOR SUPERVISORY BOARD DISCRETION
CLAW BACK AND ADJUSTMENTS
The Supervisory Board has the authority to reclaim variable
remuneration allocated to a member of the Executive Board based
on inaccurate data and/or behaviour that led to significant harm
tothe company. The Supervisory Board also has the authority to
adjust variable remuneration if application of the predetermined
performance criteria results in undesired outcomes. Accordingly,
the Supervisory Board has decision authority in situations not
addressed in the policy.
SPECIAL EMPLOYMENT CONDITIONS
Special employment conditions, such as commitments made
tosecure the recruitment of new executives, may be used in
exceptional circumstances subject to strict control by the
Supervisory Board.
SUPERVISORY BOARD DISCRETION TO REVIEW THE POLICY
AND THEREMUNERATION PAID
ING as a company is expected to undergo significant changes
during the coming years. Moreover, the relevant international
employment market is very much in flux. In order to ensure that
ING can adapt to these two uncertain factors, the Supervisory
Board indicated in 2010 and 2011 that it may re-evaluate in 2012,
whether the remuneration policy adopted in 2010 and amended on
9 May 2011, is in line with the long-term objectives of the
Company, the relevant international context, as well as the societal
perception of ING as a company. As ING’s restructuring is ongoing
and the regulatory environment continues to be in flux, the
Supervisory Board may determine to re-evaluate at a later stage.
81ING Group Annual Report 2011
Remuneration report continued