Compliance with
Articles 88 to 95 of CRD IV
ABN AMRO Group N.V. and ABN AMRO Bank N.V.
January 2016
Article 96 of the fourth Capital Requirements Directive
(CRD IV) requires institutions to explain on their website
how they comply with the requirements of Articles 88 to
and including 95 of CRD IV. This requirement has been
implemented in Dutch law by Article 134b of the Decree
on prudential measures FMSA (Besluit prudentiële regels
Wft, the Prudential Measures Decree). This overview sets
out how ABN AMRO Group N.V. (ABN AMRO) complies
with Article 134b of the Prudential Measures Decree and
Article 96 of CRD IV. Since the Managing Boards and
Supervisory Boards of ABN AMRO Group N.V. and
ABN AMRO Bank N.V. are and will be identically
composed, the following therefore also applies
mutatis mutandis to ABN AMRO Bank N.V.
Governance, nomination and management body
requirements
Articles 88 and 91 of CRD IV set (general) requirements in
respect of the management body of a financial institution,
including its role, its composition, induction and training of
its members and the number of directorships an individual
member may hold. Article 134b of the Prudential
Measures Decree in conjunction with Article 3:8
paragraphs 3 and 4 of the Dutch Financial Markets
Supervision Act (Wet op het financieel toezicht, the FMSA)
and Article 17c of the Prudential Measures Decree have
implemented those requirements in Dutch law.
Governance arrangements (Article 88 par. 1 CRD IV)
ABN AMRO has a two-tier board structure consisting of
the Managing Board and the Supervisory Board. The
Managing Board is the statutory executive body
(bestuur) and is responsible for the day-to-day
management of ABN AMRO. The Supervisory Board (raad
van commissarissen) is composed of non-executive
directors and supervises and advises the Managing Board.
Managing Board
The Managing Board is responsible for the management
of ABN AMRO’s operations. The Managing Board’s
responsibilities include, among other things, defining and
attaining ABN AMRO’s objectives, determining the
corporate strategy and risk appetite, overseeing the
internal governance and day-to-day management of
ABN AMRO’s operations. In performing its duties, the
Managing Board is required to be guided by the interests
of ABN AMRO which include the interests of the business
associated with it (including the legitimate interests of the
customers, the savers and deposit holders, the shareholders,
the depositary receipt holders, the employees, and the
society in which ABN AMRO carries out its activities).
These interests are, amongst other things, represented by
the Managing Board pursuing, with the approval of the
Supervisory Board, a “controlled remuneration policy” for
Identified Staff that are not part of Managing Board or
Supervisory Board (see further the paragraph Remuneration
Requirements below).
The Managing Board has adopted, with the approval of the
Supervisory Board, detailed rules of procedure regarding
its functioning and internal organisation, as published on
abnamro.com (the Managing Board Rules). The Managing
Board Rules also include rules for a number of committees
that the Managing Board has established and that are
responsible for the preparation of decision-making on
certain subjects and for advising the Managing Board on
certain matters.
Supervisory Board
The Supervisory Board supervises the conduct and
policies of the Managing Board and the general course of
affairs of ABN AMRO and its business. The Supervisory
Board also provides advice to the Managing Board. In
performing their duties, the members of the Supervisory
Board are required to be guided by the interests of
ABN AMRO which includes the interests of the business
associated with it (including the legitimate interests of the
customers, the savers and deposit holders, the
shareholders, the depositary receipt holders, the
employees, and the society in which ABN AMRO carries
out its activities). These interests are, among other things,
represented by the Supervisory Board pursuing a
“controlled remuneration policy” for the Managing Board,
and approving such policy for other Identified Staff (see
further the paragraph Remuneration Requirements below).
The Supervisory Board has adopted, with the approval of
the General Meeting, detailed rules of procedure
regarding its functioning and internal organisation and that
of its committees, as published on abnamro.com (the
Supervisory Board Rules). The Supervisory Board has also
drawn up a profile for its size and composition taking into
account the nature of its business, its activities and the
desired expertise and background of its members, which
is attached to the Supervisory Board Rules as Annex 4.
The Managing Board Rules and Supervisory Board Rules
further specify the responsibilities and obligations of the
Managing Board or the Supervisory Board and its
respective committees to ensure inter alia - taking into
account their respective roles - compliance with Article 88
paragraph 1 of CRD IV and Article 17c paragraph 1 of the
Prudential Measures Decree. The Managing Board Rules
and the Supervisory Board Rules also contain detailed
arrangements as to the prevention and (if they
nevertheless do arise) the appropriate procedure to be
followed in case of conflicts of interest as prescribed by
the preamble of Article 88 paragraph 1 of CRD IV.
However, ABN AMRO makes an exception with respect to
conflicts of interest that are exclusively the result of the
identical composition of the Managing Boards of
ABN AMRO Bank N.V. and ABN AMRO Group N.V. and the
respective Supervisory Boards of these entities.
Nomination requirements (Article 88 par. 2 CRD IV)
The Supervisory Board has established certain
committees that are responsible for the preparation of
decision-making on certain subjects and for advising the
Supervisory Board on certain matters. The Remuneration,
Selection and Nomination Committee is one of those
committees and is responsible for and advises the
Supervisory Board with respect to, amongst other things,
nominations and appointments of (potential) members of
the Managing Board or Supervisory Board.
The responsibilities of the Remuneration, Selection and
Nomination Committee further include to (i) make
proposals to the Supervisory Board with regard to
remuneration policies and execution thereof for members
of the Managing Board, the Supervisory Board and other
Identified Staff (as defined below), (ii) prepare the
selection and (re-)appointments regarding the Supervisory
Board and the Managing Board, (iii) prepare and
periodically review succession plans of the Supervisory
Board and the Managing Board, (iv) periodically (at least
annually) assess the knowledge, skills, experience and
functioning of (the members of) both boards, (v)
Page 2 of 5 Compliance with Articles 88 to 95 of CRD IV
periodically (at least yearly) asses the size, structure and
composition of the Supervisory Board and the Managing
Board, (vi) give advice on the desired size and composition
of the Managing Board and Supervisory Board, (vii) make
proposals on the profile of the Supervisory Board and (viii)
report on the execution of the remuneration policies
through a remuneration report.
The Remuneration, Selection & Nomination Committee
may enlist the services of an internal or external adviser
for the performance of its duties. ABN AMRO provides the
requisite financial resources, as determined by the
Remuneration, Selection & Nomination Committee, to pay
the invoices of the advisers it has engaged.
Dutch law requires ABN AMRO to pursue a policy of
having at least 30% of the seats on the Managing Board
and Supervisory Board held by men and at least 30% of
the seats on the Managing Board and Supervisory Board
held by women. ABN AMRO is required to take this
allocation of seats into account in connection with the
future (nomination for the) appointment of members of
the Managing Board and Supervisory Board. In addition,
the EBA is also expected to issue guidelines on the notion
of diversity to be taken into account for the selection of
the members of the Managing Board and Supervisory
Board. ABN AMRO currently meets the requirements for
the Supervisory Board, but does not meet these gender
diversity targets for the Managing Board (1 out of 7 is
female: 14%). ABN AMRO will continue to strive for
meeting the gender target set by Dutch law for future (re-)
appointments in the Managing Board, in line with
ABN AMRO’s diversity policy, while safeguarding the
required continuity in the discharge of the Managing
Board’s collective tasks and responsibilities. If ABN AMRO
continues to fail to meet the gender diversity targets for
the Managing Board over the remainder of 2015, it will
explain in its Annual Report for the financial year ending 31
December 2015 (i) why the seats are not allocated in a
well-balanced manner as aforesaid, (ii) how ABN AMRO
has attempted to achieve a well-balanced allocation, and
(iii) how ABN AMRO aims to achieve a well-balanced
allocation in the future.
The Supervisory Board Rules (which include the rules
regarding the functioning and internal organization of its
committees) further specify the responsibilities and
obligations of the Remuneration, Selection and
Nomination Committee to facilitate compliance with
Article 88 paragraph 2 of CRD IV and Article 17c paragraph
2 of the Prudential Measures Decree.
January 2016
Management body requirements (Article 91 CRD IV)
Remuneration policy and structure
The Managing Board and Supervisory Board of
ABN AMRO are structured in such way to ensure that the
members provide ABN AMRO with the appropriate
balance of skills, experience and knowledge as well as
independence. All those members commit sufficient time
to allow them to perform their functions and to be able to
understand the business of the bank.
▶▶ The Supervisory Board establishes the remuneration
of the individual members of the Managing Board, in
accordance with the Managing Board remuneration
policy as proposed by the Supervisory Board and
adopted by the General Meeting.
▶▶ The remuneration of members of the Supervisory
Board is set by the General Meeting based on a
proposal of the Supervisory Board.
▶▶ The Managing Board adopts the remuneration policy
for Identified Staff (with the exclusion of Managing
Board and Supervisory Board members) as approved
by the Supervisory Board, with due regard to the
advice of the Remuneration, Selection & Nomination
Committee.
All members of the Managing Boards and Supervisory
Boards have fulfilled prior to their appointment, and
continue to fulfil, the fit and proper requirements pursuant
to Article 3:8 paragraph 1 of the FMSA. In addition, each
member participates in a lifelong learning programme and
fulfils the related requirements aimed at ensuring that the
members maintain and, where necessary, broaden their
expertise. Any potential candidates for the Managing
Board or the Supervisory Board that do not pass the
suitability screening procedures with the regulators
cannot be appointed to the relevant board.
As at the date hereof, all members of the Managing Board
and Supervisory Board comply with the rules under CRD
IV as to the limitation of the number of executive
and non-executive directorships such members may hold.
However, with respect to one Supervisory Board member,
Ms Roobeek, a request is pending with the ECB for
authorisation of one additional non-executive directorship
that she currently holds.
The Managing Board Rules and Supervisory Board Rules
further specify the responsibilities and obligations of the
Managing Board or the Supervisory Board and its
respective committees to ensure - taking into account
their respective roles - compliance with Article 91 of CRD
IV and Article 134b of the Prudential Measures Decree in
conjunction with Article 3:8 paragraphs 3 and 4 of the
FMSA.
Remuneration requirements
Articles 92 to and including 95 of CRD IV provide for
requirements as to the remuneration policies for the
managing board, supervisory board and other identified
staff of institutions. These articles were (largely)
implemented in Dutch law through the Regulation on
sound remuneration Dutch Financial Markets Supervision
Act (Regeling beheerst beloningsbeleid Wft 2014) (the
Sound Remuneration Policies Regulation).
Page 3 of 5 Compliance with Articles 88 to 95 of CRD IV
Remuneration policy
ABN AMRO pursues a “controlled remuneration policy”
(beheerst beloningsbeleid) taking into account (inter)
national laws and regulations, ABN AMRO’s strategy and
risk appetite, targets and values and the long-term
interests of ABN AMRO, the relevant international context
and wider societal acceptance. It provides a framework for
effectively managing reward and performance across the
bank. In view thereof, the applicable remuneration
restrictions that follow from Articles 92 to and including
94 CRD IV and the corresponding articles in the Sound
Remuneration Policies Regulation have been embedded in
(i) the Reward Policy that applies to members of the
Managing Board, (ii) the Global Reward Policy applicable to
all employees of the bank worldwide and (iii) the
ABN AMRO Variable Compensation Plan that applies to all
Identified Staff, each as revised and applicable from time
to time. ABN AMRO applies the rules and principles set
out in the Reward Policy, the Global Reward Policy and the
ABN AMRO Variable Compensation Plan to comply with
the applicable remuneration restrictions in Articles 92 to
and including 94 CRD IV and the corresponding articles in
the Sound Remuneration Policies Regulation, it being
noted that the application of such rules and principles may
include an assessment and interpretation of such
restrictions.
The Reward Policy for the Managing Board, the Global
Reward Policy and the ABN AMRO Variable Compensation
Plan is further described in the Remuneration Report of
the Supervisory Board as included in ABN AMRO’s Annual
Report, as published on abnamro.com.
January 2016
Identified Staff
Within ABN AMRO the group of Identified Staff consists
of (i) members of the Managing Board and Supervisory
Board (for which separate remuneration policies apply), (ii)
members of the Management Group (being the
executives that are part of the three management tiers
under the Managing Board), (iii) staff responsible for
independent control functions and other risk takers, (iv)
other employees whose total remuneration takes them
into the same remuneration bracket as senior managers
and risk takers, and (v) employees who qualify on the
basis of the additional qualitative and quantitative criteria
as laid down in the applicable EBA Guideline (together:
“Identified Staff”).
The remuneration package for Identified Staff has been
structured in accordance with various regulations and
restrictions for the financial sector, including, where
applicable, Articles 92 to and including 94 CRD IV, the
corresponding articles in the Sound Remuneration Policies
Regulation, the Dutch Act on limitation of liability DNB and
AFM and bonus prohibition for state-supported
enterprises (Wet aansprakelijkheidsbeperking DNB en
AFM en bonusverbod staatsgesteunde ondernemingen,
the “Bonus Prohibition Act”) and the Dutch Act on
Remuneration Policies for Financial Undertakings (Wet
beloningsbeleid financiële ondernemingen, the
“Remuneration Policies Act”).
Managing Board
In principle, the compensation package for the Managing
Board consists of an annual base salary and a variable
remuneration component. In addition, benefits such as
participation in the ABN AMRO pension scheme for all
Dutch employees are applicable. However, pursuant to the
Bonus Prohibition Act and for as long as NL Financial
Investments (NLFI) holds, on behalf of the Dutch State, an
interest in ABN AMRO, the members of the Managing
Board are not eligible to receive variable remuneration and
also cannot participate in the Variable Compensation Plan.
Supervisory Board
The remuneration of Supervisory Board members is
proportional to the time and effort required to perform
their duties linked to the membership of the Supervisory
Board and the relevant Supervisory Board committees and
is independent of ABN AMRO’s financial results.
ABN AMRO does not grant any variable remuneration or
(options for) shares to Supervisory Board members in lieu
of remuneration.
Page 4 of 5 Compliance with Articles 88 to 95 of CRD IV
Other Identified Staff
In general, the remuneration package for other Identified
Staff has been structured in accordance with various
regulations and restrictions for the financial sector,
including Articles 92 to and including 94 CRD IV and the
corresponding articles in the Sound Remuneration Policies
Regulation. Their remuneration package generally consists
of the following components: (a) annual base salary, (b)
annual variable remuneration (with deferred payout), and
(c) benefits and other entitlements. ABN AMRO strives to
position the level of total direct compensation for
Management Group members just below market median
levels. Variable compensation for such other Identified
Staff is subject to and structured in accordance with the
Variable Compensation Plan. Performance is measured
during a one-year performance period at three levels:
group, business unit and individual level and by means of
(partly) risk-adjusted financial and non-financial
performance indicators. At least 50% of performance
indicators for the Management Group and other Identified
Staff is based on non-financial performance indicators.
Pursuant to the Variable Compensation Plan, variable
remuneration is awarded over time whereby 60% is paid
upfront and 40% is deferred. ABN AMRO may apply that
ratio differently at its sole discretion and in compliance
with the applicable remuneration restrictions. In
accordance with the remuneration restrictions that are
applicable to ABN AMRO, each payment is equally divided
into cash and non-cash instruments. Deferred variable
remuneration vests in equal instalments in three years’
time. As of the 2016 performance year (for which rewards
are attributable for the first time in March 2017) the noncash instrument portion will be expressed in depositary
receipts representing shares in the capital of ABN AMRO,
for which a two year retention period applies.
Pursuant to the Remuneration Policies Act, the
remuneration restrictions of the Bonus Prohibition Act
were extended to senior management as defined therein.
Accordingly and effective as of 2015, these senior
managers shall also not be entitled to variable
remuneration until NLFI no longer has an interest in
ABN AMRO.
The Remuneration Report of the Supervisory Board as
included in ABN AMRO’s Annual Report, as published on
abnamro.com, provides further details on the
remuneration received by the Managing Board,
Supervisory Board and other Identified Staff in the
reported financial year.
January 2016
Remuneration, Selection and Nomination Committee
The Remuneration, Selection and Nomination Committee
is one of the committees established by the Supervisory
Board and responsible for and advises the Supervisory
Board with respect to, amongst other things,
remuneration policies for members of the Managing
Board, the Supervisory Board and other Identified Staff. A
further description of the tasks of the Remuneration,
Selection and Nomination Committee is set out above
under “Nomination requirements”. The Chair of the
Remuneration, Selection and Nomination Committee, Mr.
Ten Have, was appointed as member of the Supervisory
Board on the recommendation of the Employee Council
(being ABN AMRO’s central works council).
The Managing Board Rules and Supervisory Board Rules
further specify the responsibilities and obligations of the
Managing Board or the Supervisory Board and its
respective committees to facilitate - taking into account
their respective roles - compliance with Articles 92 to and
including 95 of CRD IV and the corresponding articles in
the Sound Remuneration Policies Regulation.
Disclosure requirements
Articles 89 and 90 of CRD IV provide for country-bycountry reporting requirements and the obligation to
disclose the return on assets for the institution concerned.
These articles were implemented in Dutch law through
Articles 3, 4 and 5 of the Decree on the implementation
of disclosure requirements CRD IV (Besluit
publicatieverplichtingen richtlijn kapitaalvereisten).
ABN AMRO reported on the applicable (financial)
parameters on a country-by-country basis1 and its return
on assets2 in its Annual Report, as published on
abnamro.com.
Annual Report 2014: Annual financial statements, Note 10
Annual Report 2014: Business Report / Financial review /
ABN AMRO Group
Page 5 of 5 Compliance with Articles 88 to 95 of CRD IV
January 2016