Aligned remuneration policies
The remuneration policies are aligned with the principle of attaching equal importance to investment and risk functions, by ensuring similar salary scales for both functions and avoiding bonus structures that incentivize excessive risk taking. As a purpose-driven organization, FMO does not offer Identified Staff (senior management and staff whose professional activities have a material impact on FMO’s risk profile) any form of variable remuneration (e.g., bonuses). Most of the results are based on team effort, innovation, knowledge sharing and collaboration between colleagues in different disciplines, which does not align very well with offering bonuses related to individual performance.
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 the expectations of various stakeholders. The remuneration policy does not incentivize directors to act in their self-interest or to take risks that do not fit with FMO’s risk appetite. Furthermore, the policy does not aim to reward this behavior after the event upon discharge of failing directors. 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, considering financial sector remuneration regulation and principles applied by the Dutch Government as majority shareholder of FMO.
Employment contracts of members of the Management Board are awarded for a definite period (except for internal appointments). In the event the employment contract is terminated before the expiry date, the maximum severance payment will amount to one year’s salary, unless the board member resigns voluntarily, or the termination is the result of his or her actions.
The remuneration policy for the Management Board is reviewed every three to four years and amendments are subject to approval at the AGM. During the April 2022 AGM, no amendments to the remuneration policy were proposed or approved.
More details on the remuneration of the Supervisory Board, the Management Board and other (identified) staff members can be found on FMO’s website. Aspects of Management Board members' remuneration are also disclosed in the paragraph 'Related party information' in the 'Consolidated Financial Statements'.
The ratio between the remuneration of our CEO (being the highest-paid individual) and the median of all other colleagues (including the other Management Board members) per December 2022 was 0.29 (2021: 0.29). This means that the CEO receives a total fixed remuneration of 3.5 times the median of the fixed income paid to the rest of total staff population, which is compared to the Dutch financial sector, relatively low.
At least once a year, we conduct quantitative research on the salaries of men and women. The outcome of the (multivariate regression) analysis with reference date October 1, 2022, showed that men and women at FMO are not paid the same for equal work. On average, the analysis showed a statistically significant difference of a 3 percent lower salary for women. (In April 2021, this difference was 2.3 percent.) As we continue to strive to meet our policy objective of "rewarding men and women equally for equal work" (in line with SDG 5, gender equality), we will further investigate the root cause of this wage gap and take measures to adjust our working practices to close this relatively small but statistically significant gender pay gap.