Variable remuneration programmes

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Nordea offers a competitive and market aligned total reward offering. Nordea has a total remuneration approach to compensation that recognises the importance of well-balanced but differentiated remuneration structures based on business and local market needs, as well as the importance of remuneration being consistent with and promoting sound and effective risk management, and that does not encourage excessive risk-taking or counteractsNordea’s long-term interests.

The following incentive systems are a part of Nordea's variable remuneration.

Profit sharing Recognition VSP Bonus schemes EIP LTV GLT EIP LTIP 2007-2012 Profit sharing

Profit Sharing Plan

Profit Sharing Plan (PSP) is offered group-wide to all Nordea employees but not to Identified Staff and employees who are eligible for any of Nordea’s other formal variable remuneration plans.

For eligible employees, the Profit Sharing Plan is offered irrespective of position and salary, and aims to reward employees based on achievement in relation to pre-determined financial goals as well as goals relating to customer satisfaction. The Profit Sharing Plan is capped financially, and the outcome is not linked to the value of Nordea’s share price.

In 2019, a total of EUR 13.1m was provided under Nordea’s Profit Sharing Plan (EUR 56.9m in 2018). Each employee can receive a maximum of EUR 3,200. If all stretched performance goals were met, the cost of the Profit Sharing Plan for eligible participants would have amounted to a maximum of approx. EUR 69.8m (EUR 76.9m in 2018).

Updated: February 2020 
Source: Annual Report 2019

Recognition

Recognition schemes

Recognition Schemes is offered to employees to recognise extraordinary performance. Individual performance is assessed based on a predetermined set of goals. Identified Staff and employees eligible for other variable remuneration components (excluding Profit Sharing Plan and Recommendation Programme) are not eligible for Recognition Scheme awards.

All individual remuneration decisions are subject to separate processes and approved in line with the grandparent principle (four-eyes approval by the manager’s manager).

Updated: February 2020
Source: Annual Report 2019

VSP

Variable Salary Part (VSP)

Variable Salary Part (VSP) is offered to selected people leaders and specialists to reward strong performance. Assessment of individual performance is based on a pre-determined set of well-defined financial as well as non-financial goals, including Nordea Group goals, business area/group function/ division goals and individual goals. VSP maximum opportunity should normally not exceed a maximum outcome of 25% of annual fixed salary, except for few selected managers and specialists within specific areas of Nordea. Awards from VSP will not exceed annual fixed salary.

Awards from VSP are paid in cash. For Identified Staff, VSP awards are partly delivered in financial instruments with subsequent retention. Parts of the awards for Identified Staff in VSP are subject to a three-year pro-rata deferral period with forfeiture conditions applying during the deferral period. 

Updated: February 2020  
Source: Annual Report 2019

Bonus schemes

Bonus schemes

Bonus schemes is offered only to select groups of employees employed in specific business areas or units as approved by the Board of Directors, e.g in Large Corporates & Institutions (formerly Nordea Wholesale Banking), Nordea Asset Management, in Nordea Funds and within Group Treasury. The aim is to ensure strong performance and to maintain cost flexibility for Nordea. Bonus schemes are pool based and thus linked to a set of well-defined financial as well as non-financial goals, including Nordea Group goals. Divisional financial performance is measured as risk-adjusted profits, explicitly incorporating capital and funding costs, and is adjusted for multi-period revenue effects and minimum required profit. In the event of weak or negative overall results for the Nordea Group, bonus pools can be adjusted downwards at the discretion of the Board of Directors.

Individual awards are determined based on detailed performance assessments covering a range of financial and non-financial goals. 

2019 Bonus awards from bonus schemes are paid in cash. For Identified Staff, awards are partly delivered in financial instruments with subsequent retention. Parts of the awards for Identified Staff in a bonus scheme are subject to a three-to-five year pro-rata deferral period with forfeiture conditions applying during the deferral period.

Updated: February 2020  
Source: Annual Report 2019

EIP

Executive Incentive Programme (EIP)

Executive Incentive Programme (EIP) is offered to recruit, motivate and retain selected people leaders and key employees outside of GLT, and aims to reward strong performance and efforts. Assessment of individual performance is based on a pre-determined set of well-defined financial as well as non-financial goals, including Nordea Group goals, business area/group function/division goals and individual goals and  where relevant employing entity goals.

Individual EIP awards will not exceed annual fixed salary.

All awards from 2019 EIP are allocated partly in cash and partly in financial instruments with subsequent retention. Parts of the awards for participants in EIP are subject to a three-to-five year pro-rata deferral period with forfeiture conditions applying during the deferral period.

Updated: February 2020  
Source: Annual Report 2019

LTV

Leaders of Transformation Variable (LTV)

Leaders of Transformation Variable Programme (LTV) is offered to a selected and limited group of top management members to reward strong performance and working towards common goals. The programme is pool based with predetermined financial and non-financial goals and targets at group level as well as a collective set of performance targets for the programme participants. The individual award from the pool is determined by a performance assessment of defined goals and targets at business area/group function/division and at individual level.

Individual LTV awards will not exceed annual fixed salary.

All awards from 2019 LTV are allocated partly in cash and partly in financial instruments with subsequent retention. Parts of the awards for participants in LTV are subject to a three-to-five year pro-rata deferral period with forfeiture conditions applying during the deferral period.

Updated: February 2020
Source: Annual Report 2019

GLT EIP

GLT Executive Incentive Programme (GLT EIP, formerly GEM EIP)

GLT EIP was offered to recruit, motivate and retain the CEO and executive officers in GLT and aimed to reward strong performance and efforts, in relation to pre-determined performance goals and targets at Group, business area/group function and individual level.

GLT EIP has a one-year performance period and the outcome shall not exceed the fixed salary.

The effect on the long-term result is considered when the targets are determined. The outcome from GLT EIP is based on the Board of Directors’ assessment of performance in relation to the predetermined targets.

The outcome from GLT EIP 2019 will be paid out over a five-year period in cash and in Nordea shares, and will be subject to forfeiture clauses. No dividends are paid during the deferral period. Nordea shares will be subject to 12 months' retention.

40% of awards from GLT EIP 2019 is paid in 2020 and 30% is deferred for pay-out in 2023 and 30% is deferred for pay-out in 2025. When amounts are paid, 50% is delivered in Nordea shares, which will be subject to retention for 12 months.

For further information please refer to Nordea's Annual Report for 2019, pages 57-58.

Updated: February 2020
Source: Annual Report 2019

LTIP 2007-2012

Long-Term Incentive Programmes (LTIP) 

Nordea offered LTIP in the years from 2007-2012.

More information on Nordea LTIPs is presented in the table in note G8 in Nordea’s Annual report and in Annual reports of previous years.

Updated: February 2020