Article 1:120 of the Act on the Financial Supervision (Wet op het financieel toezicht, the AFS) requires AFS to disclose a description of its Remuneration policy. This way, AFS ensures transparency about the remuneration of its employees.
The regulation on Sound Remuneration Policies (Regeling beheerst beloningsbeleid Wft 2021 –Rbb 2021) applies to the remuneration policy of investment firms. Based on these rules, AFS Execution Services B.V. (hereinafter “AFS”) established a policy regarding controlled remuneration of its employees and other persons working under its responsibility (here in after collectively referred to as Employees) (the Remuneration Policy). Protecting the interests of customers is a top priority for AFS. The remuneration policy is an important element thereof.
The Remuneration policy covers both the fixed and the variable remuneration of the Employees.
The control functions are responsible for controlling and monitoring risk arising from the company’s operations, ensuring compliance with the remuneration policy. The risk function is assessing how the remuneration structure affects the risk profile of the AFS. The Compliance department is responsible for the preparation, application and review of the Remuneration policy. The Management Board approves the Remuneration policy. The Compliance department together with control conducts functions conduct an annual review of the Remuneration policy to consider whether any adjustments are necessary.
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 its 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.
The Remuneration Policy is in line with AFS's 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 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 solidity of AFS.
AFS considers the following general principles when establishing and implementing the Remuneration policy:
- 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's long-term objectives; and
- The payment of remuneration must be in line with AFS's financial situation.
The remuneration structure is appropriate to the size and organization of AFS and to the nature, scope, and complexity of its activities. The total remuneration of AFS employees can consists of fixed and variable remuneration.
- 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 time employee is employed
- The responsibility that the Employee has within AFS.
- 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. 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.
The variable remuneration is discretionary decided by the management of AFS and approved by AFS Group.
The following criteria are included in the consideration of an individual variable remuneration:
- Willingness to support direct colleague’s
- Willingness to educate and support juniors
- Willingness to acquire new clients
- Willingness to go on sales
- Willingness to learn new products
- Willingness to comply to rules and in- and external procedures
- Dedication and amount of effort
- Personal turnover
- Personal quality of turnover
- Desk turnover
- Department turnover
Employees don’t have a right on variable remuneration. No additional remuneration is paid to departing employees upon leaving employment at AFS. 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, inline with their specific position. AFS has no employees receiving a total annual remuneration of EUR 1 million or more.