ING Direct 2009 Annual Report Download - page 185

45 STAFF EXPENSES
Staff expenses
Banking operations Insurance operations Total
2009 2008 2007 2009 2008 2007 2009 2008 2007
Salaries 3,555 3,816 3,646 1,521 2,069 2,050 5,076 5,885 5,696
Pension and other staff-related benefit costs 178 104 159 142 140 48 320 244 207
Social security costs 510 516 466 161 205 201 671 721 667
Share-based compensation arrangements 58 75 73 38 49 54 96 124 127
External employees 660 1,056 668 96 160 160 756 1,216 828
Education 57 105 81 811 65 116 81
Other staff costs 195 252 331 159 206 324 354 458 655
5,213 5,924 5,424 2,125 2,840 2,837 7,338 8,764 8,261
Share-based compensation arrangements includes EUR 65 million (2008: EUR 98 million; 2007: EUR 110 million) relating to equity-settled
share-based payment arrangements and EUR 31 million (2008: EUR 26 million; 2007: EUR 17 million) relating to cash-settled share-based
payment arrangements.
Pension and other staff-related benefit costs
Pension benefits
Post-employment benefits
other than pensions Other Total
2009 2008 2007 2009 2008 2007 2009 2008 2007 2009 2008 2007
Current service cost 320 356 408 –8 –2 11 –38 5–13 274 359 406
Past service cost 20 77 –86 –21 –1 –1 77 –87
Interest cost 778 787 739 10 11 13 94 9 797 802 761
Expected return on
assets –842 –886 –869 1 –841 –886 –869
Amortisation of
unrecognised past
service cost –1 –1 –5 –1 –1 –5
Amortisation of
unrecognised actuarial
(gains)/losses 106 –23 29 –5 54106 –23 33
Effect of curtailment
or settlement –96 –140 –32 –96 –140 –32
Other –14 –18 –62 –7 15 6 1 1–12 –68
Defined benefit plans 272 153 127 –25 812 –8 15 0239 176 139
Defined contribution
plans 81 68 68
320 244 207
Remuneration of senior management, Executive Board and Supervisory Board
Reference is made to Note 33 ‘Related parties’.
Stock option and share plans
ING Group has granted option rights on ING Group shares and conditional rights on depositary receipts (share awards) for ING shares to a
number of senior executives (members of the Executive Board, general managers and other officers nominated by the Executive Board),
and to a considerable number of employees of ING Group. The purpose of the option and share schemes, apart from promoting a lasting
growth of ING Group, is to attract, retain and motivate senior executives and staff.
ING Group holds its own shares in order to fulfil its obligations with regard to the existing stock option plan and to hedge the position risk
of the options concerned (so-called delta hedge). As at 31 December 2009, 35,178,086 own shares (2008: 32,367,870; 2007: 36,028,881)
were held in connection with the option plan compared to 122,334,486 options outstanding (2008: 87,263,381; 2007: 76,888,553). As a
result the granted option rights were (delta) hedged, taking into account the following parameters: strike price, opening price, zero coupon
interest rate, dividend yield, expected volatility and employee behaviour. The hedge is rebalanced regularly at predetermined points in time.
In December 2009 ING Groep N.V. completed a rights issue of EUR 7.5 billion. Outstanding stock options and share awards have been
amended to reflect the impact of the rights issue through an adjustment factor that reflects the fact that the exercise price of the rights
issue was less than the fair value of the shares. As a result, exercise prices and outstanding share options and share awards have been
amended through an adjustment factor of approximately 1.3.
2.1 Consolidated annual accounts
ING Group Annual Report 2009 183
Notes to the consolidated profit and loss account of ING Group (continued)