Voya 2013 Annual Report Download - page 445

benefits to compensate him for certain expenses and cost differentials attributable to his expatriate status, as well
as amounts to cover the taxes on those benefits. These benefits are described in more detail in the footnotes to the
“—Summary Compensation Table” and “—All Other Compensation for 2013” table. Mr. Steenbergen’s
expatriate benefits applied only until April 1, 2013, when Mr. Steenbergen was localized.
For the first three months of 2013, Mr. Steenbergen participated in ING Group health care and insurance
programs that are generally available to all expatriates on assignment with the Company. He also participated in
the ING Directors’ Pension Scheme during that time, the Dutch tax-qualified, contributory defined benefit
pension plan in which similarly situated employees of ING Group are eligible to participate. Upon
Mr. Steenbergen’s localization on April 1, 2013, his compensation and benefits were aligned with practices for
local U.S. employees. See “—Employment Agreements—Employment Agreement of Mr. Steenbergen”.
Critical Compensation and Other Policies
Tax Deductibility of Compensation
Under Section 162(m) of the Internal Revenue Code, a public company generally may not deduct
compensation in excess of $1 million paid to its chief executive officer and the three other most highly
compensated executive officers (other than the chief financial officer). Until the expiration of the post-IPO
transition period provided by the rules and regulations of the Internal Revenue Code, compensation awarded
under a pre-IPO plan or arrangement is generally exempt from the deduction limits of Section 162(m), unless
such plan or arrangement is materially amended or certain other events occur.
For compensation that is not otherwise exempt from Section 162(m), amounts paid to the aforementioned
officers will only be exempt from the deduction limit to the extent that it complies with the conditions set forth in
Section 162(m) and the related Treasury regulations, including that such compensation be based on the
satisfaction of performance conditions and be submitted for the approval of our stockholders. Until March 2014,
we were subject to the CRD Limitations that prohibited us from granting equity incentive awards, including
under the Omnibus Plan, that are subject to performance conditions. Nevertheless, our Compensation and
Benefits Committee seeks to minimize the impact of Section 162(m), while maintaining overall NEO
compensation packages that it deems to be in the interests of the Company and adhering to the requirements of
the CRD Limitations while they were applicable to us. See “—Capital Requirements Directive”. The Company
reserves the right to pay in the future compensation that is not exempt from the deduction limit, when it deems
such compensation to be in the interests of the Company.
Under Section 162(m)(6) of the Internal Revenue Code, which was introduced as part of the 2010
Affordable Care Act, certain health insurance providers cannot deduct compensation for any employees in excess
of $500,000. The Company has determined that it is not subject to Section 162(m)(6) for calendar years 2010
through 2013. The Department of the Treasury issued proposed regulations under Section 162(m)(6) in 2013, but
those regulations have not been finalized. The Company is continuing to monitor this issue and will determine
whether the Section 162(m)(6) limitations will apply in the future based on that guidance. To the extent that the
Company is subject to any of these limits on deductibility of compensation, the Company reserves the right to
approve non-deductible compensation.
Compensation Recoupment Policies
Certain elements of our NEOs’ compensation packages are subject to recoupment or being “clawed back” or
“held back” under certain circumstances. Under both the CRD policies described below (which became
applicable to the Company on January 1, 2012) and the terms of the LSPP (pursuant to which both performance
plan shares and deferred plan shares of ING Group have been granted), ING Group has the right to claw back
awards previously settled with or paid to our NEOs, or hold back awards previously made to our NEOs that have
not yet vested if (i) activities conducted under the responsibility of the NEO, including fraud or malfeasance, led
to a material restatement of ING Group’s or the Company’s annual accounts or resulted in significant
23