Remuneration Policy

1. Introduction

1.1. Background

The remuneration policy of AFS is tailored to the size and organization AFS and to the nature, scope and complexity of its activities, and is gender neutral. The policy aims at renumeration of AFS employees, which is in line with the relevant market, but also takes into the account the clients’ best interest and the financial stability of AFS.

The remuneration policy complies with the relevant legal requirements as set out in, among others, the Financial Undertakings Remuneration Policy Act in the Financial Supervision Act (Wft) and the Regulation on Sound Remuneration Policies (Regeling beheerst beloningsbeleid Wft 2021 – Rbb 2021).

Based on these rules, AFS Group B.V. and its subsidiaries (hereinafter “AFS”) established a policy regarding controlled remuneration of its employees and other persons working under its responsibility (hereinafter collectively referred to as Employees). Protecting the interests of clients as well as its long-term goals are a priority for AFS. The Remuneration Policy is an important element thereof.

1.2. Scope of the policy

‍This Remuneration Policy applies to all Employees of AFS. The Remuneration Policy covers both the fixed and the variable remuneration of the Employees.

1.3. Governance, preparation, application and review

‍The Compliance department is responsible for the annual preparation, application and review of the Remuneration Policy, which will also be discussed in AFS Risk Committee. The Management Board approves the Remuneration Policy. The Compliance department conducts an annual review of the Remuneration Policy to consider whether any adjustments are necessary and also. Compliance monitors compliance with the remuneration policy.

Compliance monitors compliance with the remuneration policy.

2. Remuneration principles

2.1. Purpose

The remuneration of employees can influence the manner in which they conduct their job. With this Remuneration Policy, AFS intends to minimize the risk of wrong incentives for Employees as much as possible. This way, AFS can ensure that the Remuneration Policy does not have a negative impact on the protection of the interests of clients.

2.2. Appropriateness of the Remuneration Policy

The Remuneration Policy is in line with AFS’ strategy, objectives and risk appetite. The Remuneration Policy contributes to the effective management of risks by AFS, as it avoids that Employees take risks that are not acceptable to AFS. The Policy also contributes to the financial stability of AFS and its compliance with its long-term goals, as it prohibits the granting of a bonus in case AFS results don’t permit this according to its strategy, this policy or according to applicable regulation. The Remuneration Policy should be set up in a way that AFS can attract and retain qualified and expert employees, without this remuneration having a negative impact on the quality of the services provided by AFS or the stability of AFS.

2.3. General principles

AFS considers the following general principles when establishing and implementing the Remuneration Policy:
- The Remuneration Policy is consistent with the company’s results, financial soundness, business strategy, objectives, values and long-term interests and is inline with, and contributes to sound and effective risk management;
- Employees are assessed on the basis of both quantitative (financial) and qualitative (non-financial) criteria;
- The performance criteria do not contain incentives to take higher risks than deemed acceptable by AFS;
- The Remuneration Policy must not lead to conflicts of interest between Employees and clients;
- The payment of variable remuneration should be appropriate in relation to AFS’ long-term objectives and capital requirements;
- The payment of remuneration must be in line with AFS’ financial situation;
- The policy ensures that Employees are remunerated in a gender-neutral way. AFS aims to recruit and retain the best talent available, regardless of their gender, age, ethnicity, faith or sexual orientation. AFS is committed to providing equal employment opportunities to all qualified job applicants;
- The policy ensures that for employees whose work is related to the provision of services to clients, one or more of the KPIs that have been established for the individual employee are linked to compliance with the procedures and policies of AFS as well as to following mandatory awareness training. The latter negative non-financial performance in the form of materially unethical or non-compliant behavior weighs more heavily than any good financial performance;
- The Remuneration Policy is clear, transparent and (in principle) applicable to all employees in design, governance and methodology;
- The Renumeration Policy contains a claw back methodology;
- The Remuneration Policy is in accordance with applicable laws and regulations;
- The Remuneration Policy is periodically evaluated and, if necessary, adapted to new or amended laws, regulations or market standards.

3. Remuneration structure

‍The remuneration structure is appropriate to the size and organisation of AFS and to the nature, scope, and complexity of its activities.
‍
The total remuneration of AFS employees can consist of fixed and variable remuneration.

3.1. Fixed remuneration

‍Fixed remuneration is the part of the total remuneration that consists of unconditional financial and non-financial benefits.

The fixed remuneration of all employees is based on the following criteria:  
- the level of education of the Employee;
- the relevant experience of the Employee;
- the tenure of the Employee;  
- the responsibility that the Employee has within AFS.  

AFS ensures that Employees are paid equally for equal work or comparable work and that no distinction is made on the basis of gender, race, sexual-orientation, ethnicity or religion.

3.2. Variable remuneration

The variable remuneration is the part of the total remuneration that is not fixed remuneration, but of which the amount is not clear or uncertain in advance or based on the performance of the employee.

AFS does provide its employees with variable remuneration within the rules and regulation of the Wft and the Rbb 2021. There can only be variable remuneration if AFS as an entity has a positive result in the period over which the variable remuneration is decided and when this is possible given the (capital) requirements of AFS. Furthermore, in line with its discretionary character, AFS reserves the right to deny variable renumeration in the event of non-compliant behavior by an employee (such as - but not limited to - not respecting the best interest of the client, inappropriate behavior or misconduct).

The variable remuneration is discretionary decided by the Management Board.

The following criteria are included in the consideration of an individual variable remuneration:
· Willingness to support direct colleagues;
· Willingness to educate and support juniors;
· Willingness to acquire new clients;
· Willingness to go on sales;
· Willingness to learn new products;
· Willingness to follow awareness sessions;
· Compliance to AFS policies, conduct regulation and in-and external procedures;
· Behavior in the best interests of the client and in line with AFS long term goals;
· Dedication and amount of effort;
· Personal turnover;
· Personal quality of turnover;
· Desk turnover;
· Department turnover;

In case of misconduct and material non-compliance with rules, regulation or procedures no renumeration shall be given even though there may be a high score on other criteria.

Employees don't have a right on variable remuneration.

No additional remuneration is paid to departing employees upon leaving employment with AFS.

3.3. Remuneration of control staff
‍
‍Employees in control functions, such as compliance and risk, receive a remuneration that benefits their independent role. This does not include remuneration based on the performance of the company. Employees in control functions receive an appropriate fixed remuneration, in line with their specific position.

3.4. Claw back

In line with existing legislation, AFS has the ability to recover paid out variable remuneration if the payment was made on the basis of materially incorrect information about the achievement of the objectives, compliance with conduct regulation or circumstances underlying the bonus.

This ability applies to a bonus given to an employee or to a member of the Management Board which has not met appropriate standards of competence and proper conduct, or was responsible for conduct that has led to a significant deterioration in the position of AFS.  

4. Publication

Article 1:120 of the Act on the Financial Supervision (Wet op het financieel toezicht, Wft) requires AFS to disclose a description of its Remuneration Policy on its website and in its annual report. This way, AFS ensures transparency about the remuneration of its employees.

AFS publishes a summary of this Remuneration Policy on its website. On its website, AFS also discloses:
- How many employees receive a total annual remuneration of EUR 1 million or more, as well as the business unit for which they mainly perform work;  
- The total amount of variable remuneration paid annually to its employees.

AFS includes the aforementioned information also in its annual reports.