Nordea Remuneration components - purpose and eligibility

Fixed Salary is compensating employees for full satisfactory performance. The individual salary is based on three cornerstones: Job complexity and responsibility, performance, and local market conditions.

Profit Sharing is aiming at stimulating value creation for the customers and shareholders and is offered to all employees. The performance criteria for 2012 programme reflect Nordea’s long-term targets: Return On Equity (ROE) and Customer Satisfaction.

Variable Salary Part (VSP) ) is offered to selected managers and specialists to reward strong performance. Assessment of individual performance shall be based on a pre-determined set of well-defined financial as well as non-financial success criteria, including Nordea Group criteria.

Bonus scheme is offered only to selected groups of employees employed in specific businesses areas or units. The aim is to ensure strong performance and maintain cost flexibility for Nordea. Judgement of individual performance shall be based on a pre-determined set of well-defined financial as well as non-financial success criteria, including Nordea Group criteria.

One Time Payment (OTP) can be granted to employees in case of extraordinary performance exceeding requirements or expectations. Employees participating in a Bonus scheme cannot be offered an OTP and employees having Variable Salary Part can only in extraordinary situations be offered an OTP.

Pension and Insurance schemes are aiming at ensuring employees an appropriate standard of living after retirement as well as personal insurance during employment. Pension and insurance provisions are according to local law, regulation and market practice done either in form of determined public collective-agreements, company determined schemes or in a combination of these elements. Nordea aims at having defined contribution pension schemes.

Benefits in Nordea are given as a means to stimulate performance and well being. Benefits are either connected to the contract of employment or local conditions.

Long Term Incentive Programme (LTIP) aims at improving the long-term shareholder value and to strengthen Nordea’s capability to retain and recruit the best talents. The programme targets managers and key employees identified as essential to the future development of the Nordea Group. Performance criteria in LTIP 2012 reflected Nordea’s internal version of ROE being Risk-Adjusted Return On Capital At Risk (RAROCAR) and Price to Book compared to the Nordic and European peers.

In 2013 Nordea Executive Incentive Programme (EIP) will be introduced, replacing LTIP and VSP for the invited employees.

Further information regarding Profit Sharing, Variable Salary Part, Bonus schemes and Long Term Incentive Programmes.

Source: Annual Report 2009