Executive Board remuneration

Executive pay is an important issue for many of AEGON's shareholders, customers and employees. AEGON believes the current debate over executive pay is a legitimate one, particularly in light of the recent global financial crisis. AEGON has a clear and well-defined policy with regard to executive remuneration, which ensures that pay for members of the Executive Board is closely linked to the performance of the company and the long-term interests of its shareholders.

 

AEGON believes it has a part to play in the current debate over executive pay, alongside other stakeholders. During 2009, executive pay was discussed internally at meetings of AEGON's Supervisory Board, as well as externally with, among others, representatives of the Dutch Ministry of Finance.   

 

Executive remuneration policy

AEGON's policy with regard to executive remuneration allows AEGON to attract and retain highly qualified  members for its Executive Board, as well as ensuring that the interests of Executive Board members are closely aligned with those of the company's shareholders.

AEGON's policy is reviewed each year by the company's Compensation Committee. If necessary, the Committee recommends amendments to the Supervisory Board. Material changes, if any, are then submitted by the Supervisory Board to the annual General Meeting of Shareholders for adoption.

The policy applies to all members of AEGON's Executive Board and is, in addition, used as a framework to determine remuneration for members of the company's Management Board and senior managers throughout the organization.

 

AEGON's present remuneration policy took  effect on January 1, 2007. A new policy will be proposed to the company's annual General Meeting of Shareholders on April 29th, 2010.

 

Under the terms of the current policy:

 

  • AEGON regularly compares its levels of executive remuneration with those at other, comparable companies in both North America and Europe.
  • AEGON's Supervisory Board sets a so-called 'Total Target Compensation' for each member of the Executive Board, comprising a fixed component and variable compensation linked to the performance of the company.
  • Payments are made in cash and in the form of conditionally granted shares.
  • Variable compensation is dependent on AEGON's financial performance, as measured by three indicators:
    • Net underlying earnings
    • Value of new business
    • Total shareholder return.
  • In addition, the Supervisory Board may also make discretionary adjustments to Executive Board members' variable compensation if it considers that AEGON's business is being affected by significant and exceptional circumstances that are not reflected in the indicators.

 

For more details on AEGON's Executive Board remuneration policy, please click here.