The remuneration policy pertains to the remuneration of the Executive Board (EB) and the Supervisory Board (SB). The remuneration policy consists of:

• A fixed salary within a salary scale (no variable remuneration system);

• EB members progress through the scales in the same way as a.s.r. employees;

• Part of the fixed salary is paid out in shares.

The following four perspectives are used as a basis for the remuneration policy:

1. The organisational perspective: how a.s.r. presents itself as a company;

2. The internal perspective: consistency in the internal salary structure;

3. The external perspective: competitive with the external market;

4. The stakeholders’ perspective: taking into account the views of different stakeholder groups on remuneration: customers, shareholders, employees, and society.

The organisational perspective

It is a.s.r.’s view that society may expect it to be a valuable insurer which handles the funds entrusted to it and the environment in which it operates in a responsible way. With respect to the remuneration of the EB, society may expect this to be in line with a.s.r.’s profile, and that both the remuneration policy and the level of executive remuneration are reasonable from that perspective.

In line with this perspective, a.s.r. has a fixed salary only and no variable remuneration scheme. a.s.r. is of the opinion that such a scheme is not in line with the company’s culture. The opinion of society towards variable remuneration in the financial sector is also relevant in this respect.

The internal perspective

All a.s.r. employees have job-weighted salaries within defined salary scales that they progress through over time. The remuneration of EB members is determined by the various roles within the EB and fall within certain salary scales. The link between roles and salary scales is consistent throughout the organisation. For all employees including the EB, the maximum of a salary scale is at most around the median of the reference group.

In principle, EB members progress through the salary scales in the same way as employees. For employees, an annual growth of 3% of the maximum of the scale is applied (provided there is upward room in the scale). For EB members, the SB has the mandate to slightly adjust this growth path upwards or downwards (growth of 0% to 6%), taking into account a.s.r.’s performance and the principles of the remuneration policy. The SB accounts for this in the annual remuneration report.

The a.s.r. Collective Labour Agreement (CLA) applies to the EB with regard to salary indexation.

The external perspective

a.s.r. pays its employees a salary in line with the market. Market conformity is tested against a reference group. The reference group for the EB consists of Dutch financial institutions and Dutch listed companies, many of which have a social profile and of which at least half must be financial institutions including insurers. To be included in the reference group, the non-financial institutions must meet at least two of three criteria for comparable size with a.s.r. These criteria are: turnover, market capitalisation and number of employees. All remuneration data of companies in the reference group must be published individually. a.s.r.’s position is approximately in the middle of this reference group.

The SB also periodically tests the median against a Europe Control group, consisting of at least 10 European financial institutions. The Europe Control group serves as an additional check of the median that follows from the reference group, so that European developments in this area can also be monitored. The Europe Control group has no direct effect on the median or the remuneration set.

The 2023 reference group for other employees is the financial services industry. For some positions within Group Asset Management and Real Estate, the reference group is the asset management market. To prevent the salary scales of employees and the EB from diverging too much, partly as a result of the difference in reference groups, salary scales of the EB are validated against the reference group of other employees bi-annually. If the gap widens too much, this may be a reason to adjust the  maximum of the salary scales of the EB members. The ratio between the remuneration of the CEO and the average remuneration of a.s.r.’s employees must be less than 20.

The stakeholders’ perspective

The structure of the remuneration policy was reviewed against the views of shareholders, customers, employees and society. The views and interests of these different stakeholder groups are taken into account as much as possible.

Customers must be able to rely on a solid insurance company that offers understandable products and services at a reasonable price. Customers must be able to rely on the company to handle the funds entrusted to it with care; this includes a reasonable remuneration policy. Society expects a financial institution that contributes to society as a whole. Employees expect a reliable employer that ensures the long-term continuity of the company. Employees expect adequate remuneration for their efforts. With regard to board remuneration, they expect their remuneration and any changes to fit the character of the company and to be explainable. Shareholders benefit from a solid company that offers attractive returns. Shareholders expect alignment of the board with their interests, with executive remuneration keeping pace with the company's performance. The remuneration policy should be such that high-quality board members can be retained and attracted.

Periodical review

The Remuneration Committee reviews the principles of the remuneration policy against the four perspectives (at least) once every four years. The remuneration policy is submitted for a vote (at least) once every four years at an AGM. The market comparison (remuneration benchmark) is carried out once every two years by an external and independent consultancy firm.

The performance of each EB member is reviewed annually, based on a set of financial and non-financial targets approved by the SB. The targets for 2023 can be summarised as follows:

• Shareholder: realisation of the financial targets and the financial KPIs in the multi-year budget within the established risk appetite and with a visible focus on sustainable long-term value creation;

• Customer: targets to improve a.s.r.’s service and to retain its customers over a long(er) period. This target is measured by tracking the development of both the NPS and the scores of the annual reputation survey. Other targets include expansion of financial services, further digitisation in the interest of the customer, and sustainable reputation;

• Employee: a minimum annual Denison scan score of 86;

• Society: further expansion of the positioning of a.s.r. as a sustainable long-term value-creating insurer and socially aware financial institution. This is measured by different ratings and benchmarks;

• Sustainability targets: Carbon footprint reduction across the whole investment portfolio, and an increase in impact investments.

These targets are complemented by specific strategic priorities for each EB member, such as the integration of a.s.r. and Aegon NL, implementation of IFRS 17/9, implementation of a partial internal model for a.s.r., and the details of the digitalisation roadmap. Targets are discussed periodically during various evaluation meetings between the SB and (members of) the EB. After assessing the financial and non-financial targets of a.s.r. and the performance of the EB, all in relation to the perspectives of the remuneration policy, the SB may adjust the growth path of EB members within their salary scale from 0% to 6%.

Contractual aspects

EB members work on the basis of an indefinite contract for services. Each contract ends by operation of law as soon as a party ceases to be an EB member. A contract can also be terminated with a notice period of six months for a.s.r. and three months for an EB member. The contracts also contain a provision for dismissal due to a change of control.

The following conditions apply to severance pay for policymakers (which includes EB members):

• The maximum severance pay is 100% of the (fixed) annual remuneration;

• Severance pay is not awarded in the event of the company’s failure;

• No severance pay is awarded that can be classified as variable;

• Severance pay may not be awarded to any employee (including EB members) in the following cases:

  • If an employment relationship is terminated prematurely at the employee’s own initiative, except where this is due to serious culpable conduct or neglect by the employer.

  • In the event of serious culpable conduct or neglect by the employee and/or an urgent reason for instant dismissal applies.

Pay ratio

a.s.r. is transparent concerning the remuneration of the EB, not only in terms of actual amounts, but also in accordance with Dutch law and the Dutch Corporate Governance Code as compared with the average remuneration of all employees of a.s.r. As laid down in the remuneration policy, the ratio between the remuneration of the CEO and the average remuneration of the employees at a.s.r. should at all times be less than 20. The current pay ratio is 1:13.2. The SB feels that this pay ratio is reasonable. Compared to the remuneration of other executive directors of comparable companies, this pay ratio is among the lowest.