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Remuneration policies

Our people and knowledge are our most important capital. We want our employees to offer our clients a high level of quality and service, so we pay considerable attention to training and development, and offer our employees a competitive employment package.

Remuneration policy governance

The Statutory Board sets the remuneration policy for employees, based on the advice of the Human Resource Management (HRM), Finance, Reporting & Control, Group Risk Management and Compliance departments. These, together with Group Audit, also have an important part to play in setting up, adjusting, implementing and reviewing our variable remuneration policy. They advise the Statutory and Supervisory Boards and report to them on their conclusions.

The Statutory Board is responsible for implementing our remuneration policy. The Supervisory Board approves our variable remuneration policy, including its general principles, and oversees its implementation. Approval by the Supervisory Board is also required for our variable remuneration pools, any significant individual variable remuneration, and for individual variable remuneration proposed for employees designated as identified staff. The Supervisory Board’s Remuneration Committee prepares the Supervisory Board’s decision-making on remuneration and advises it in this area.

Fixed remuneration

Employees’ fixed remuneration reflects their relevant working experience and organisational responsibilities.

Variable remuneration policy for Van Lanschot Kempen employees

Van Lanschot Kempen has variable remuneration policies in place governing all employees of Van Lanschot N.V. (Van Lanschot) and Kempen & Co (Kempen), and based on the principle that it ought to be possible to reward employees who distinguish themselves through their performance. According to this principle, every employee can be considered for a variable remuneration award.

Based on operating results, the Statutory and Executive Boards determine whether variable remuneration will be awarded and what amount is available, taking into account achievement of financial and non-financial performance criteria. The boards submit the proposed amount for the variable remuneration pool for the approval of the Supervisory Board, and any deviations also require Supervisory Board approval.

Once the amount available for variable remuneration at Van Lanschot and Kempen has been determined,the Statutory Board decides how this variable remuneration will be distributed at Van Lanschot, while Kempen’s Management Board decides on its distribution at Kempen.

The average variable remuneration of all Van Lanschot Kempen employees who work (largely) in the Netherlands may not exceed 20% of their fixed remuneration.

Variable remuneration of up to 100% of fixed remuneration may be granted on special grounds in individual situations. This only applies to a small number of employees.

Award

Variable remuneration to individual employees is awarded on the basis of individual performance, market competitiveness and special factors. An employee’s personal performance is assessed on quantitative (i.e. financial) and qualitative (non-financial) performance criteria, with some departments applying only qualitative criteria. At least 50% of the allocation of any variable remuneration is based on non-financial criteria.

Individual performance is measured based on the degree to which employees have achieved targets set at the beginning of the year. Performance criteria include nothing that might encourage irresponsible risk-taking.

Variable remuneration is only awarded if 1) Van Lanschot Kempen’s financial position allows; 2) it is justified by the performance of Van Lanschot Kempen, the relevant business unit and the individual employee; 3) Van Lanschot Kempen meets the prevailing buffer requirements under the EU´s Capital Requirements Regulation (CRR), the Dutch Financial Supervision Act (Wft) and its implementing legislation; 4) the risks taken have been reassessed and no material risks have occurred that were not expected or factored in; and 5) the employee has received a good performance assessment, has met compliance targets, has not been subject to disciplinary measures and has not taken any risks that fall outside Van Lanschot Kempen’s accepted risk profile.

Payment

Variable remuneration can be paid to employees entirely in cash up to a gross maximum of €50,000. If it exceeds this amount, 50% of the portion above the gross figure of€50,000 is paid immediately and unconditionally and the remaining 50% conditionally and on a deferred basis over a period of three years following the year in which it was awarded.

The Statutory Board may, with the approval of the Supervisory Board, hold or claw back all or part of the:

  • Conditional variable remuneration previously awarded to an employee (or former employee) if payment of the  ariable remuneration would be considered unfair or unreasonable (“malus”);
  • Variable remuneration previously paid to an employee (or former employee). This might occur, for instance, if payment was based on incorrect information about achievements or about the conditions on which the variable remuneration depended.

If payment has taken place on the basis of such incorrect information, or has been made in conflict with the variable remuneration policy and/or applicable legislation and regulations, the Statutory Board will exercise its authority in this respect.

Long-term share plan

Our 2015 long-term share plan (LTP) allows us to award variable remuneration to certain key employees, including identified staff. The plan is not open to members of the Statutory or Executive Boards. Offering variable remuneration in the form of depositary receipts for Class A Van Lanschot Kempen shares (“Van Lanschot Kempen shares”), the LTP is governed by our variable remuneration policy. Under the LTP, 60% of the Van Lanschot Kempen shares are awarded immediately and unconditionally, while 40% are awarded conditionally over a period of three years starting in the year after the year of conditional award (the vesting period).

Profit-sharing plan

In 2017, we introduced a profit-sharing plan for all Van Lanschot Kempen employees working in the Netherlands to further increase their alignment with Van Lanschot Kempen as shareholders. As a result, for the 2017 financial year, an equal number of Van LanschotKempen shares were granted to all employees in scope in February 2018. The number of shares is linked to Van Lanschot Kempen’s profit and is conditional on this exceeding a certain threshold. A lock-up period of two years applies and the same profit-sharing plan will be offered in 2018.

Remuneration policy for identified staff of Van Lanschot Kempen

Identified staff are employees whose activities have a material impact on the risk profile of the business. Strict additional rules apply to the variable remuneration of this group of employees. The identified staff remuneration policy applies to all identified staff of Van Lanschot Kempen. Members of the Statutory and Executive Boards are not eligible for variable remuneration.

The criteria of the variable remuneration policy for identified staff are the same as for Van Lanschot Kempen’s variable remuneration policy. The variable remuneration of identified staff is paid 50% in cash and 50% in Van Lanschot Kempen shares, while the variable remuneration of identified staff of Kempen Capital Management NV (KCM) is paid 50% in cash and 50% in a flexible mix of Van Lanschot Kempen shares and investments in funds managed by KCM. In all cases,60% of both parts of the variable remuneration is awarded immediately and unconditionally, and 40% conditionally and deferred. This deferred remuneration is then paid out over a period of three years following the year of award. Whether an award becomes unconditional depends on reassessment of a number of predetermined criteria. If this reassessment leads to a review of the deferred remuneration, a malus penalty system applies. A lock-up period of one year applies to Van Lanschot Kempen shares that have become unconditional.

More information about our remuneration policy for identified staff can be found in our financial statements.

Statutory Board remuneration policy

The remuneration policy for members of Van Lanschot Kempen’s Statutory Board is adopted by the General Meeting following a proposal by the Supervisory Board. The policy is aimed at ensuring a balanced, sustainable and competitive remuneration package.

The current remuneration of the members of the Statutory Board was approved and adopted at the General Meeting of 31 May 2018 and became effective from 1 January 2018.

When adopting the Statutory Board remuneration, we consider pay ratios within the company. The relationship between the average salary for Van Lanschot Kempen employees and that of the Chairman of the Statutory Board, the pay ratio, works out at 10.8. To arrive at this figure, we calculate the average labour cost by dividing total staff costs by the number of FTEs working for Van Lanschot Kempen. The total staff costs are detailed on page 192 of the financial statements 2017.

We ended all variable remuneration for the Statutory Board in 2015, with the board having received only a fixed salary since. This is partly paid in cash and partly in depositary receipts for Van Lanschot Kempen shares (“shares”). The shares-based payment is governed by the following conditions:

  • all members of the Statutory Board are required to hold the cash portion of two years’ gross salary in shares for a minimum of two years;
  • the proportion of fixed salary paid in shares has a lock-up period of five years.

These conditions ensure that the long-term interests of Van Lanschot Kempen and its stakeholders are even more closely tied to the interests of the members of the board.

In December 2017, Willis Towers Watson conducted a market assessment for the remuneration of the members of the Statutory Board. The group it used for reference purposes included:

•    Dutch banks
•    Western European specialist stand-alone wealth management companies
•    Dutch listed corporates outside the banking industry

This market comparison puts total remuneration in the 29th percentile of the reference group, well below this group’s median level.

For information on the composition of the reference group used for the market comparison of Statutory Board remuneration, please refer to the tables at the end of this page. This information is an integral part of the remuneration section.

Statutory Board remuneration

The following table shows the remuneration of members of the Statutory Board. There are no early retirement schemes for Board members. Their severance remuneration is in line with current statutory and regulatory rules and amounts to one year’s gross salary. There is also no variable compensation. The Statutory Board’s remuneration has two elements:

  • salary;
  • payment towards pension and disability.

Statutary Board remuneration

Type of payment

Purpose/rationale

Fixed salary

Cash

Reflects responsibilities, performance and market trends

Fixed salary

Depositary receipts for Van Lanschot Kempen shares

Achievement of long-term strategy

Payment towards pension and disability

Cash

Market competitiveness

Payment towards pension and disability

The members of the Statutory Board are responsible for their own pension provision, towards which they receive a payment. They also receive a payment for taking out disability insurance.

Statutory Board gross salary

Chairman

Members

Fixed in cash

€772,500

€437,750

Fixed in depositary receipts for Van Lanschot Kempen shares

€387,500

€312,250

 

Pension and disability

Chairman

Members

Payment towards pension and disability

€378,044

€244,425

The members of the Statutory Board also receive an expense allowance.

Supervisory Board remuneration policy

The remuneration of the members of the Supervisory Board was set by the General Meeting of 31 May 2018 and became effective from 1 January 2018. This remuneration breaks down as follows:

 

Chairman

Deputy Chairman

Member

Supervisory Board remuneration

€90,000

€70,000

€60,000

Audit and Compliance Committee

€15,000

 

€10,000

Risk Committee

€15,000

 

€10,000

Remuneration Committee

€10,000

 

€7,000

Selection and Appointment Committee

€10,000

 

€6,000

The members of the Supervisory Board also receive an expense allowance.

Remuneration in 2017

Employees’ variable remuneration

Variable remuneration totalling €15.9 million was paid to employees (including identified staff) of Van Lanschot Kempen.

Highest remuneration

One person within Van Lanschot Kempen received total annual remuneration of over €1 million in 2017.

Remuneration of the Statutory Board

The tables below show the remuneration and other payments received by members of the Statutory Board in 2017 and 2016. 

Remuneration of Statutory Board (€)

 2017 1

Total fixed remuneration

Cash

Van Lanschot Kempen shares

Pension payment

Disability insurance payment

Expenses

Karl Guha

1,004,250

779,250

225,000

200,850

24,605

5,160

Constant Korthout

643,750

443,750

200,000

135,188

16,674

5,160

Richard Bruens

643,750

443,750

200,000

135,188

16,674

5,160

Arjan Huisman

643,750

443,750

200,000

135,188

16,674

5,160

 

 2016

Total fixed remuneration

Cash

Van Lanschot Kempen shares

Pension payment

Disability insurance payment

Expenses

Karl Guha

975,000

750,000

225,000

195,000

23,888

5,160

Constant Korthout

625,000

425,000

200,000

131,250

16,188

5,160

Richard Bruens

625,000

425,000

200,000

131,250

16,188

5,160

Arjan Huisman

625,000

425,000

200,000

131,250

16,188

5,160

1 Total fixed remuneration increased by 3% with effect from 1 January 2017 (in 2017 the increase in total fixed remuneration was paid fully in cash). Pension and disability payments are calculated as a percentage of total fixed remuneration.

Remuneration of the Supervisory Board

The amounts paid to the members of the Supervisory Board in 2017 and 2016 are shown in the following table. In addition, members receive annual expense reimbursements of €2,500.

Remuneration of Supervisory Board (€)1  

 

2017

20165

 

Membership fee

Committee fees

Total

Membership fee

Committee fees

Total

Willy Duron (Chairman)

75,000

32,000

107,000

75,000

32,000

107,000

Manfred Schepers (Deputy Chairman)2

40,000

9,000

49,000

-

-

-

Jeanine Helthuis

50,000

14,000

64,000

50,000

14,000

64,000

Bernadette Langius

50,000

12,000

62,000

50,000

12,000

62,000

Godfried van Lanschot

50,000

10,000

60,000

50,000

10,000

60,000

Lex van Overmeire3

45,833

19,417

65,250

-

-

-

Jos Streppel4

 25,000

 11,250

 36,250

60,000

27,000

87,000


1 Some figures have been rounded to the nearest thousand.
2 Manfred Schepers was appointed to the Supervisory Board on 18 May 2017.
3 Lex van Overmeire was appointed to the Supervisory Board on 30 January 2017.
4 Jos Streppel stepped down from the Supervisory Board on 18 May 2017.
5 Tom de Swaan stepped down from the Supervisory Board on 25 February 2016. In 2016, he received €8,167 in remuneration.

Market comparison reference group

Statutory Board

Company

Perspective

Bil

Activity perspective

Degroof Petercam

Julius Bär

KBL

Lombard Odier

Vontobel

ABN Amro

Dutch banking perspective

ING Groep

NIBC Bank

Rabobank

Aegon

Corporate perspective

ASML

Boskalis Westminster

DSM

KPN

Vopak

NN Group

Supervisory Board

Company

   

ABN Amro

Akzo Nobel

NN Group

ING Groep

ASML Holding

Philips

Rabobank

Boskalis Westminster

Randstad Holding

NIBC Bank

DSM

SBM Offshore

Aegon

Heineken

Vopak

Ahold Delhaize

KPN

Wolters Kluwer