Related party information
FMO defines the Dutch Government, FMO's subsidiaries, associates, the Management Board (MB) and Supervisory Board (SB) as related parties.
The Dutch Government holds 51 percent of FMO’s share capital. The remaining 49 percent is held by commercial banks and other private investors. FMO received its last contribution to the development fund from the Dutch Government in 2005. FMO has a support agreement with the Government, which is detailed in the ‘Additional Information’ section.
FMO stimulates the development of small and medium Dutch-sponsored enterprises in selected emerging markets through the ‘Faciliteit Opkomende Markten’ (FOM). This is a joint initiative with the Dutch Government. The Dutch Government acts as a guarantor for 80 percent to 95 percent of the outstanding loans. As of 1 July 2016, the mandate of this facility has been transferred to the ‘Rijksdienst voor Ondernemend Nederland’. After the transfer, only existing loans in the portfolio and pipeline were serviced. These loans are included in the consolidated financial statements under ‘Loans to the private sector’.
FMO manages several government programs at the risk and expense of the Dutch Government. Below is a description of the various programs:
1. MASSIF: FMO manages the MASSIF program on behalf of the Dutch Government. MASSIF enhances financial inclusion for micro-entrepreneurs and small- and medium-sized enterprises (MSMEs) in the poorest social-economic segments, which are underserved by the local financial sector. The program supports financial intermediaries that reach out to MSME’s in fragile and low-income countries, in rural areas and agriculture, female and young entrepreneurs and in innovative sectors. FMO has a 2.16 percent (2021: 2.16 percent) stake in this program. For 2022, FMO received a fixed remuneration of €11.5 million (2021: €11.0 million). In 2022, one private equity investment was transferred to FMO (€32.7 million), but no loans were transferred from MASSIF to FMO.
2. Building Prospects: Through this program, FMO focuses on the development of the social and economic infrastructure in least developed countries. The objective is to stimulate private investors to invest in private or public-private infrastructure projects in these countries. For 2022, FMO received a fixed remuneration for services rendered of €9.3 million (2021: €8.9 million). In 2022, no loans and private equity investment positions were transferred from Building Prospects to FMO.
3. Access to Energy Fund (I and II): The Access to Energy Fund I was set up by the Dutch Government and FMO in 2007 to support private sector projects aimed at providing long-term access to energy services in Sub-Saharan Africa. FMO provides financing through equity, local currency loans, subordinated debt and grants to facilitate projects that generate, transmit or distribute sustainable energy. In 2017, the Access to Energy Fund II committed US$55.6 million to Climate Investor One, an investment vehicle with three interlinked funds that invest in projects during their whole lifetime. For 2022, FMO received a fixed remuneration for services rendered of €3.9 million (2021: €3.3 million). In 2022, one private equity investment was transferred to FMO (€13.9 million), but no loans were transferred from Access to Energy Fund I and II to FMO.
4. Dutch Fund for Climate and Development: Land Use Facility: In 2019, the Dutch Government awarded a tender to manage the €160,0 million Dutch Fund for Climate and Development (DFCD) to the consortium of FMO, Stichting SNV Nederlandse Ontwikkelingsorganisatie, Stichting Het Wereld Natuur Fonds-Nederland, and Coöperatief Climate Fund Managers U.A. (through Climate Investor Two). FMO is the lead partner in the DFCD consortium and responsible for the management of the DFCD’s Land Use Facility. In 2022, the Dutch Government provided €13.6 million for the Land Use Facility (in addition to the aggregate amount of €42.7 million, disbursed in previous years).
5. Capacity Development Program: This invests in inclusive projects, focusing particularly climate change and gender. For 2022, FMO received no remuneration for the services provided.
In our role of program manager for the assets under management, FMO holds current account positions with the government programs mentioned above. The balances of those current account positions are disclosed under Note 14.
The consolidated subsidiaries FMO Representative Office LAC Limitada, Asia Participations B.V. and Equis DFI Feeder L.P. are used for intermediate holding purposes. The subsidiary FMO Investment Management B.V. carries out portfolio management activities for third party investment funds that are invested in FMO’s transactions in emerging market and developing economies.
The transactions during the year are summarized in Note C of the company balance sheet.
We hold stakes directly in private equity companies or indirectly via fund structures. These equity stakes are held as a part of FMO's overall investing activities, or in some cases, for strategic purposes (for example the Invest International investment). Investments are treated as associates in case the criteria of our accounting policies are met.
Reference is made to the significant accounting policies and the 'Investments in associates' note for transactions during the year.
Remuneration of the Management Board
FMO’s remuneration policy for the Management Board aims to attract, motivate and retain capable directors with sufficient knowledge and experience in international development finance. The remuneration policy is aligned with the mission of FMO, the corporate values, the strategy, the risk appetite as well as with the expectations of the various stakeholders. The remuneration policy is based on a market median, composed of two equal proportions of a private benchmark (Dutch financial sector) and a public benchmark, taking into account the principles as applied by the Dutch Government as majority shareholder of FMO.
Furthermore, the policy aims to be unambiguous and transparent and should never encourage of directors to act in their own interest, or to take risks that do not fit within the mission and established strategy of the company. Neither should the policy reward behavior of failing directors upon discharge.
Employment contracts of members of the Management Board are awarded for a definite period of time (with exception of one internal appointment). In the event the employment contract is terminated before the expiry date, the maximum severance payment will amount one year’s salary, unless the board member resigns voluntary, or the termination is the result of his or her actions.
The remuneration policy for the Management Board will be reviewed every three to four years and amendments will be subject to approval of the AGM. In 2022 a benchmark review has been conducted by an external consultant. During the 2022 AGM no amendments were made with respect to the remuneration policy. Depending on the outcome of a recent policy review amendments may be proposed during the 2023 AGM.
Changes in Management Board
In 2021, FMO decided to extend the Management Board with two extra members. The board now consist of five functions: a CEO, two Co-Chief Investment Officers, a Chief Risk Officer and a Chief Finance & Operations Officer. Two new appointments were made in 2022:
Franca Vossen was appointed Chief Risk Officer (CRO) as per September 1, 2022, and
Peter Maila was appointed as Co-Chief Investment Officer (Co-CIO) as per December 1, 2022.
Both new Management Board members have been appointed for four years. The compensation related to these appointments are aligned with the remuneration policy of the Management Board.
The total remuneration consists of a fixed salary (including holiday allowance), a pension arrangement and other benefits. A summary of the employment arrangements and amounts constituting the total remuneration per Management Board member in 2022 are provided below.
Fixed salary remuneration
As per March 1, 2022 the maximum salary cap-applicable to the CEO increased by 2.5% (in conformity with the structural salary adjustment of the collective labor agreement, CLA Banks) to €300k. During 2022, the fixed remuneration for the CEO was equal to the maximum cap. For the other members of the Management Board this salary cap was €255k and for Directors the salary cap was €220k (as per March 1, 2022). In the future only structural salary adjustments as indicated by the CLA Banks will be applicable to the salary caps.
Members of the senior management (Management Board members and Directors) and other members of the identified staff are not entitled to any form of variable income (e.g. individual bonuses).
As per January 1, 2022, the pension scheme changed into a defined contribution scheme for all employees of FMO, including members of the Management Board. For pensionable salary up to the applicable threshold, which for 2022 amounted to €114k, a defined contribution is made by the employer. Accrued pension entitlements in the previous defined benefit scheme remain in the former scheme, in which the nominal pension obligations are guaranteed by a pension insurer.
The other benefits include accident and disability insurance, appropriate expense allowances and the use of a company car, Dutch national business card or mobility allowance. The company has also taken out a directors’ and officers’ liability insurance on behalf of the Management Board members.
The members of the Management Board have no options, shares or loans related to the company. Acceptance of ancillary positions requires the explicit approval of the Supervisory Board.
All members of the Management Board are appointed for a period of 4 years, which can be renewed. Mrs. Bouaré serves in her second term of appointment and has an employment contract for a definite period of time.
Mr. De Ruijter is serving in his first term and has an employment contract for an indefinite period of time (related to his internal promotion). Mrs Vossen, Mr Jongeneel and Mr Maila serve in their first term.
There are no employees at FMO who earn more than the CEO. In accordance with the GRI Standards, the ratio between the total fixed remuneration of the highest-paid individual, the CEO, and the median of the rest remained 0.29 (2021: 0.29). Or in other words the highest-paid individual received a total fixed remuneration of 3.5 times the amount paid to the median of (the rest of) the total staff population. Compared to what is seen in the financial sector in the Netherlands this ratio remained relatively low.
Remuneration of the Management Board
On December 31, 2022 the Management Board consisted of five statutory members (2021: three). The total remuneration of the Management Board in 2022 amounts to €1,112k (2021: €1,064k) and is specified as follows:
Other short term employee benefits
Michael Jongeneel (CEO)
Fatoumata Bouaré (CFOO)
Huib-Jan de Ruijter (CCIO)
Peter Maila² (CCIO)
Franca Vossenᶾ (CRO)
- 1 The allowance for retirement of Huib-Jan de Ruijter (€1k) is reported under pension.
- 2 Peter Maila has been appointed as Co-CIO per December 1, 2022.
- 3 Franca Vossen has been appointed as CRO per September 1, 2022.
Allowance for retirement
Other short term employee benefits
Huib-Jan de Ruijter2)
- 1 Linda Broekhuizen stepped down as per September 1, 2021, as CEO ad interim and continued up to February 28, 2022, as advisor to the Management Board. The remuneration presented in the table entails the total remuneration in 2021 as CEO and advisor. The remuneration related to the advisory role amounts to €116k (of which €83k relates to fixed remuneration).
- 2 Huib-Jan Ruijter was appointed CIO as per 8 July 2021
Except for pensions of €133k (2021: €118k) all components above are short term employee benefits.
Remuneration of Supervisory Board
The remuneration policy for the Supervisory Board will be reviewed every three to four years, taking into account the principles as applied by the Dutch Government as majority shareholder. Amendments will be subject to the approval of the AGM. The members of the Supervisory Board have no shares, options, or loans related to the company.
The annual remuneration of the members of the Supervisory Board is as follows:
Remuneration member 2022 1)
Dirk Jan van den Berg 2)
Reintje van Haeringen6)
- 1 As per March 1, 2022, the remuneration of SB has increased by 2.5 percent.
- 2 Dirk Jan van den Berg is Chair of the SB and member of the SARC.
- 3 Koos Timmermans is the Chair of the ARC.
- 4 Thessa Menssen resigned from the SB as per January 1, 2022, until then Thessa was member of the ARC and the Chair of the Impact Committee.
- 5 Dugald Agble is member of the ARC.
- 6 Reintje van Haeringen is Chair of the SARC and member of the Impact Committee.
- 7 Marjolein Demmers is member of the Impact Committee and member of the SARC.