ING Direct 2009 Annual Report Download - page 82

PROPOSED NEW REMUNERATION POLICY
FOR SENIOR MANAGEMENT
As much as possible for a global financial institution of this size,
ING aims to take account of all the differences and standards
applied within similar financial institutions in the various countries
in which it operates. The remuneration of members of the
Management Boards and senior management will be in line
with the general principles of the new remuneration structure
for the Executive Board, taking into account international and
local practices.
Total direct compensation
Total direct compensation levels will be based on benchmark
data in the international context in which we operate. We aim
for compensation levels to be set at market median levels.
Total compensation levels will be determined in line with the
relevant market.
Increased focus on long-term value creation,
risk and non-financial performance
Variable compensation will increasingly be linked to long term
value creation and risk. It will be determined based on individual,
business and company performance criteria. Performance
measurement will increasingly account for estimated risks and
costs of capital. There will be increased emphasis on long term
value creation by means of long term incentives, deferral and
claw-back mechanisms.
Furthermore, and in addition to financial indicators, performance
will also be assessed based on non-financial drivers. The
incorporation of non-financial indicators in the overall assessment
is particularly aimed at further improving sustainable business
practices within ING. Therefore, a number of action targets are
being formulated regarding ING’s performance in the area of e.g.
workforce diversity, customer satisfaction, stakeholder engagement
and sustainable product development.
SENIOR MANAGEMENT REMUNERATION STRUCTURE 2010
Given the differences in the regulatory requirements for banking
and insurance and the upcoming separation of ING’s banking and
insurance activities, the remuneration structures for senior
management in ING’s banking and insurance operations were
determined separately.
The remuneration policy for the Executive Board will apply in full to
members of the Management Board Banking. For senior
management in Banking, there will be a gradual shift over the next
three years to a more balanced mix between fixed salary and
variable pay in line with the remuneration policy for the Executive
Board. Exceptions may exist for high value specialists and senior
management working in certain divisions and/or geographical
areas. For the Management Board Insurance and senior
management in our insurance operations, adjustments will be
made in line with the general principles of the new remuneration
policy for the Executive Board. However, changes in the mix
between fixed salary and variable pay will need to be weighted in
light of the different regulatory requirements for insurance and the
upcoming separation of ING’s banking and insurance activities.
Moreover, compensation packages related to control functions
(such as risk management functions) will be structured such that
they provide for a reduced emphasis on variable compensation.
To ensure the autonomy of the individual, financial performance
metrics will depend on objectives determined at the divisional
level (i.e. not at the level of the relevant business unit). In addition,
performance assessments will not only be determined by business
unit management, but also by the functional line.
Remuneration report (continued)
1.3 Our governance
ING Group Annual Report 2009
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