Remuneration of the executive board

2008 remuneration policy

During the 2008 annual general meeting, the amended remuneration policy applicable to the executive board and the regulations contained therein on the subject of remuneration in the form of shares, in accordance with the principle of the 2003 Dutch corporate governance code regarding the adoption and publication of the remuneration and article 2:135 of the Netherlands Civil Code, was set and adopted by the general meeting (“the 2008 remuneration policy”). The 2008 remuneration policy was based on the 2003 Dutch corporate governance code.

2009 remuneration policy

During the annual general meeting of 2009, a limited amendment of the 2008 remuneration policy was made and (insofar required) adopted (“the 2009 remuneration policy”). The amendment of the 2008 remuneration policy involved a modification to the composition of the peer group.

The 2009 remuneration policy is based on the 2003 Dutch corporate governance code. The new contents of the Code have, therefore, not been incorporated as part of the limited amendment of the 2008 remuneration policy, which was adopted at the annual general meeting of 2009 (and which resulted in the 2009 remuneration policy). BinckBank wanted to await the developments of 2009 in the field of remuneration prior to implementing these in a remuneration policy to be adopted later. This has proved to be a wise decision, since the social discussion on the remuneration of executive board members continued throughout the year 2009.

2010 remuneration policy

In 2009, the credit crunch resulted in a number of recommendations for the remuneration of executive board members and senior management. In 2009, after the Dutch corporate governance code (the Code) was amended at the end of 2008, the NVB and the AFM made a number of recommendations in the field of remuneration. These recommendations have been incorporated in the Banking Code and the Principles for a controlled remuneration policy.

Hence the supervisory board has had to reassess the remuneration policy and has come to the conclusion that the 2009 remuneration policy needs to be revised. The supervisory board will, for that reason, submit a new remuneration policy for adoption at the general meeting of 2010 (“the 2010 remuneration policy”).

The 2010 remuneration policy will take into account the relevant social developments in this field. In addition, with a view to the specific nature of the company, the 2010 remuneration policy will be brought into line with the contents of the various recommendations in the Code, the Banking Code and the Principles for a controlled remuneration policy.

The remuneration elements within the 2010 remuneration policy, which is planned to come into force on 1 January 2010, consist of a fixed gross annual salary, a variable short-term payment, a variable long-term payment, a pension provision, a supplementary disability insurance, a car lease scheme and reimbursement of mobile telephone charges.

The fixed gross annual salary is set by the supervisory board within a predefined framework. Here a distinction is made between the tasks and responsibilities of the Chairman and those of the other members of the executive board.

The variable short-term payment is a gross cash payment which, in addition to the fixed, gross annual salary, can be granted to a executive board member during a calendar year (pro rata), subject to a maximum of 1/3 of the gross annual salary. The granting of a variable short-term payment depends on the degree to which the budgeted, adjusted net annual profit has been realised. In order for a variable short-term payment to be granted, at least 80% of the budgeted, adjusted net annual profit must have been realised.

The long-term payment is a variable gross payment in ordinary BinckBank shares which, in addition to the fixed gross annual salary and a possible variable short-term payment, can be granted to a executive board member during a calendar year (pro rata). A variable long-term payment is subject to a maximum of 2/3 of the fixed gross annual salary.

A variable long-term payment depends for 50% on the degree to which the qualitative, annual, long-term oriented objectives set by the supervisory board have been achieved according to the discretionary judgement of the supervisory board, and for 50% on the degree to which such quantitative objectives have been realised. In the event that a variable long-term payment is granted, the executive board member is bound to a lock-up arrangement of five calendar years.

Executive board members participate in a pension scheme as part of which 20% of the gross annual salary is paid by the company in the form of pension contributions into a defined contribution scheme, each year. BinckBank pays 50% of the premium for the supplementary disability insurance, which gives entitlement to a maximum of 70% of the most recent salary. The premium amounts to 2.3630% of the sum insured per annum.

Executive board members participate in a car lease scheme applicable at BinckBank and have their mobile telephone charges reimbursed.

The supervisory board members, or BinckBank, in the event that an employment contract with an executive board member is terminated within one calendar year of a variable long-term payment having been granted, are entitled to demand that the variable long-term payment is repaid (partially or in full).

The supervisory board is entitled to differentiate between executive board members when granting a variable short-term payment and/or a variable long-term payment. Relevant therein is that the objectives set by the supervisory board are collective in nature.

In addition to its other discretionary powers as formulated in the 2010 remuneration policy, the supervisory board is entitled to make a downward or upward adjustment of the value of a variable remuneration element granted in a previous calendar year if, in the opinion of the supervisory board, the value leads to an unfair result due to special circumstances in the period in which the predefined performance criteria were or must have been realised.

The supervisory board is entitled to reclaim a variable payment granted on the basis of incorrect (financial) information from an executive board member (claw-back clause).

A possible severance scheme in the event of the dismissal of an executive board member is subject to a maximum value of once the fixed gross annual salary of the executive board member. If this maximum appears to be unreasonable for a executive board member who is dismissed in his first term of appointment, this executive board member can qualify for severance pay equal to a maximum of twice the fixed gross annual salary.

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