28. Co-worker and Other Administrative Expenses

Pension expenses

The pension expenses for the defined contribution schemes and the defined benefit pension schemes are based on the contributions owed for the financial year.

Pension scheme per country

Triodos Bank’s pension scheme in The Netherlands is a combination of a defined benefit pension scheme and a defined contribution scheme. For the part of the gross annual salary up to EUR 52,766 a defined benefit pension scheme applies; the obligation vis-à-vis the participating co-workers consists of the granting of the accrued pension. For the part of the gross annual salary above EUR 52,766, a defined contribution scheme applies; the commitment to the participating co-workers consists of paying the outstanding contribution to a maximum of EUR 103,317.

In The Netherlands, co-workers of related parties also participate in the pension scheme. The total pension commitment and the resulting expenses are reported within the Notes to the consolidated Annual Accounts of Triodos Bank NV. Part of the expenses are charged to the respective related parties, based on their share of the total salaries of the participating co-workers.

The Triodos Bank pension schemes in Belgium, the United Kingdom, Spain and Germany are defined contribution schemes that have been placed with life insurance companies in those countries. The commitment to the participating co-workers consists of paying any outstanding contribution. Participation in the pension scheme is obligatory for co-workers in Belgium, Spain and  the United Kingdom. In Belgium, co-workers’ contribution is 2% of salary and the employer’s contribution is 6%. In Spain, the pension contribution is 1.5% of salary, paid in full by the employer. In the United Kingdom, the co-workers’ contributions are optional with those who opt to do so contributing between 1% and 10% of their salary, and the employer’s contribution amounts to 5% or 10% of salary depending on length of service.

In Germany, participation in the pension scheme is voluntary. The co-workers’ contribution is 3.33% of the salary and the employer’s contribution is 6.67%. 98% of the co-workers in Germany participate in the pension scheme.

International Remuneration and Nomination policy

The International Remuneration & Nomination Policy is based on the principle of human dignity and aims to enhance social coherence within the organization. The policy incorporates the Regulation of the Dutch Central Bank on Sound Remuneration Policies, the EBA Guidelines on Sound Remuneration Policies, EBA Guidelines on remuneration of sales staff and GRI standards for sustainability reporting. In our view remuneration enables co-workers to earn a decent living and to contribute to the organization and society at large. Triodos Bank believes in the intrinsic motivation of its co-workers to contribute to our mission and to work according to our corporate values. The richness of the contribution of each co-worker cannot be translated into a linear, financial incentive.

Triodos Bank operates in the financial sector. Therefore its remuneration practice needs to be within the scope of what is expected in the financial sector. It allows for a healthy in- and outflow of co-workers. At the same time Triodos Bank maintains a relatively low ratio between the lower and higher level of salaries paid. Variable components are modest and discretionary. This all contributes to a strong sense of being jointly responsible for realizing the mission of Triodos Bank.

This International Remuneration and Nomination Policy has been revised in 2017 and was approved by the Supervisory Board on November 10th, 2017.

The remuneration paid to the members of the Executive Board is set by the Supervisory Board upon advice of the Nomination and Compensation Committee. The basic principles of the Triodos Bank remuneration system are taken into account.

The remuneration paid to Supervisory Board members and members of the Foundation for the Administration of Triodos Bank Shares (SAAT) Board is set at the Annual General Meeting and the Annual Meeting of Depository Receipt Holders respectively, whereby modest remuneration is offered so that sufficient qualified members can be attracted and retained.

Key elements of Triodos Bank’s international remuneration policy are:

• Triodos Bank does not offer bonus or share option schemes to either members of the Executive Board, the Supervisory Board, the Board of SAAT nor to co-workers. Financial incentives are not considered an appropriate way to motivate and reward co-workers in a values-based bank. In addition, sustainability is by its very nature the result of a combined effort by team members aimed at both the short and long term.
• Triodos Bank may provide additional individual "Tokens of Appreciation”. These Tokens of appreciation are very limited and discretionally decided and are maximum one months’ salary with a maximum of EUR 10,000 gross a year. These contributions are for extraordinary achievements and are at the discretion of management after consultation with Human Resources. Such a token is not based on pre-set targets, and always offered in retrospect. The Tokens of Appreciation are subject to claw back arrangements. The members of the Executive Board are excluded from these awards.
• An annual, collective token of appreciation can be paid for the overall achievements and contribution of all co-workers. This very modest amount is the same, for all co-workers with a maximum of EUR 500 gross for each co-worker. This can be paid in cash or in Triodos Bank NV depository receipts. For 2017 no collective end-of-year token of appreciation was awarded.
• The factor by which the maximum salary in the lowest scale and the maximum salary for senior management differs, will be monitored carefully in each country (the ratio in The Netherlands was 9.9 in 2017 (it was 9.9 in 2016 and 9.8 in 2015)), to ensure the discrepancy between the highest and lowest remunerated co-workers is not excessive. Some specific cases are excluded from this ratio, for example when very junior co-workers are recruited as a kind of apprenticeship or less qualified/educated people are appointed to create job opportunities for vulnerable people.
• Severance payments should be modest and should never reward failure or misconduct. Severance payments to members of the Executive Board do not exceed one year’s salary.

More details on the Triodos Bank remuneration policy are available on the www.triodos.com website.

The table below provides the loans that have been granted to the members of the Executive Board.

No other loans, advances or guarantees have been granted to members of the Executive Board, Supervisory Board members or members of Board of SAAT. For reasons of principle, no share option scheme is offered to members of the Executive Board, Supervisory Board members or members of Board of SAAT.

Remuneration paid to the Executive Board

The remuneration paid to the members of the Executive Board is as follows:

The salary expenses of the Executive Board may be broken down as follows:

Remuneration paid to the Supervisory Board

The remuneration paid to the Supervisory Board members is as follows:

The following fees apply (per annum):

• EUR 17,500 Member of the Supervisory Board;
• EUR 25,000 Chair of the Supervisory Board;
• EUR 4,000 Member of the Audit & Risk Committee;
• EUR 5,000 Chair of the Audit & Risk Committee;
• EUR 3,000 Member of the Nomination and Compensation Committee;
• EUR 4,250 Chair of the Nomination and Compensation Committee;

Supervisory Board members who travel to a meeting outside their home country receive EUR 1,000 per return travel (to a maximum of EUR 12,000 per annum) as compensation for travelling time.

Remuneration of the Board of SAAT

The remuneration for the members of the Board of the Foundation for the Administration of Triodos Bank Shares, is as follows (amounts in EUR):

The following fees apply (per annum):

• EUR 7,000 Member of the Board of SAAT;
• EUR 10,000 Chair of the Board of SAAT;

Board of SAAT members who travel to a meeting outside their home country receive EUR 1,000 per return travel (to a maximum of EUR 12,000 per annum) as compensation for travelling time.

Auditor’s fees

The table below specifies the fees of the PricewaterhouseCoopers Accountants N.V. (‘PwC Accountants NV’) audit firm that relates to services concerning the financial year.

The column Other PwC network specifies the fees that were invoiced by PwC units with the exception of PwC Accountants NV.

Our auditor, PwC Accountants NV, has rendered, for the period to which our statutory audit 2017 relates, in addition to the audit of the statutory financial statements the following services to the company and its controlled entities.

Other audit services required by law or regulatory requirements:

• Statutory audits of controlled entities
• Audit of the regulatory returns to be submitted to the Dutch Central Bank and the National Bank of Belgium
• Assurance engagement on cost price models to be submitted to the AFM
• Assurance engagement on segregation of assets to be submitted to the AFM

Other audit services:

• Assurance engagement on the sustainability report
• Assurance engagement profit forecast
• ISAE type II engagement
• Agreed upon procedures on interest rate risk and DGS reporting to the Dutch Central Bank

Regulatory expenses

The regulatory expenses can be broken down as follows: