Remuneration Report 2022

Remuneration policy 2022

The highlights of the policy are described below. The execution of and reporting on the remuneration policy and practices for the Executive Board, Supervisory Board, Board of SAAT, Identified Staff (co-workers in positions who may have a material impact on the risk profile of Triodos Bank) and all co-workers are described in subsequent sections.

International Remuneration and Nomination policy 2022

The International Remuneration and Nomination policy is based on the principle of human dignity and aims to enhance social coherence within the organisation. The policy incorporates all applicable legislation on remuneration. In our view, remuneration enables co-workers to earn a decent living enabling them to contribute to the organisation 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 to allow for a healthy inflow 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 exceptional¹, modest and discretionary and are not an incentive to favour co-workers’ or the bank’s own interest to the detriment of Triodos Bank’s customers. This all contributes to a strong sense of being jointly responsible for realising the mission of Triodos Bank.

A revised International Remuneration and Nomination policy was approved by the Supervisory Board on 9 December 2022.

The remuneration paid to the members of the Executive Board is set by the Supervisory Board upon advice of the Remuneration Committee. The remuneration policy for the Executive Board is in accordance with the International Remuneration and Nomination policy.

Key elements of Triodos Bank's International Remuneration and Nomination policy are:

• Award fair and relatively modest remuneration in the form of fixed pay for all co-workers, based on the principle that the bank’s results are the joint accomplishment of all co-workers.

• Triodos Bank does not offer bonus or share option schemes to members of the Executive Board, the Supervisory Board, the Board of SAAT or co-workers. Financial incentives are not considered an appropriate way to motivate and reward co-workers in a values-based bank. In addition, long-term value creation is by its very nature the result of a combined effort by team members aimed at both the short and the long term.

• Triodos Bank may provide individual tokens of appreciation. These are limited and decided on a discretionary basis. They are restricted to a maximum of one month's salary and EUR 10,000 gross each year. These contributions are for extraordinary achievements, subject to specific criteria, and are at the discretion of management after consultation with Human Resources. Tokens of appreciation are not based on preset targets and are always offered post factum. The tokens of appreciation are subject to clawback regulations in accordance with the EBA Guidelines. Members of the Executive Board are excluded from these awards. More information on the conditions regarding granting of tokens of appreciation can be found in the extract of the International Nomination and Remuneration policy as available on the website.

• An annual collective token of appreciation can be paid for the overall achievements and contribution of all co-workers. This amount, with a maximum of EUR 500 gross per person, is the same for all co-workers, whether they work full time or part time, and awarded pro rata to those not in service throughout the whole year. Members of the Executive Board do not receive this award. In 2022, no collective end-of-year token of appreciation was awarded.

• Triodos Bank provides local pension plans. Each country has a collective pension policy for all its co-workers if that is appropriate for the local circumstances. If there is no local policy, individual arrangements are made in the context of the labour contract. Under no circumstances are pension rights used to award specific achievements.

• Severance payments are in line with the principles of the International Remuneration and Nomination policy. They should provide for entitled compensation upon the termination of the employment contract and should never reward failure or misconduct. Severance payments to members of the Executive Board do not exceed one year’s salary, in line with the DNB and EBA guidelines on sound remuneration. Severance payments to other co-workers do not exceed one year’s salary unless local legislation requires otherwise.

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

As part of preparation to the MTF launch, Triodos Bank will review, and update when necessary, the current International Nomination & Remuneration Policy and the Remuneration Policy for the Executive Board in due course of 2023. Triodos Bank will also develop for transparency purposes a Supervisory Board Remuneration policy in due course of 2023. Any updates to the Remuneration Policy for the Executive Board and a Remuneration Policy for the Supervisory Board are subject to approval of the annual general meeting of shareholders.

Fair remuneration

In 2022, Triodos Bank decided to pay a cost-of-living contribution to co-workers. The level of contribution was set in accordance with local income thresholds and local practices to support co-workers who are impacted most by the cost-of-living crisis. Given the aim to support the most impacted co-workers, the contribution was not paid automatically to eligible co-workers under the income threshold. Eligible co-workers had to actively opt in for the contribution. In line with Triodos Bank values, we trusted our co-workers to fairly assess whether they needed this extra support based on their personal situation.

Triodos Bank believes people should be properly and appropriately rewarded for their work. Pay is an important element of this. Remuneration within Triodos Bank is neutral for all co-workers, irrespective of gender, ethnic background, age, sexual orientation or distance to the labour market.

In 2022, we engaged an external party, AnalitiQs, to carry out an in-depth gender pay gap analysis. The outcomes lead to the conclusion that an overall correction is not needed. More information is found in the Co-worker report under Equity, diversity and inclusion.

To provide a clear insight into remuneration at Triodos Bank we report the ratio of the highest full-time salary to the median full-time salary. The ratio of the highest full-time salary to the median full-time salary was 5.1 in 2022 (2021: 5.2). This ratio is also reported in the Key Figures section at the start of this Annual Report in accordance with GRI methodology. It is reviewed and discussed within the Executive Board and with the Supervisory Board in light of developments inside and outside the organisation.

Triodos Bank seeks a healthy balance between external developments (competition and tensions in the labour market, balanced inflow and outflow of co-workers) and internal consistency. Maintaining this balance presents challenges as the business evolves, so the organisation has defined a bandwidth as a guiding principle. For the ratio of highest to median pay this stands at seven.

Remuneration of the members of the Executive Board is focused on long-term value and takes into account the internal pay ratios within the company.