Related party information

FMO defines the Dutch Government, FMO's subsidiaries, associates, the Management Board (MB) and Supervisory Board (SB) as related parties. 

Dutch Government

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. This agreement sets out the conditions for when the Government is obliged to support FMO in meeting its obligations. The agreement includes an arm’s length amount that is payable by FMO annually. This amount is not material to the financial results of FMO. The updated agreement introduces a limitation on the amount that can be borrowed by FMO in financial markets. This limitation is currently set at 2.5 times FMO’s current total debt.

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 (2022: 2.16 percent) stake in this program. For 2023, FMO received a fixed remuneration of €10.1 million (2022: €11.5 million). In 2023, no loans or equity investments were transferred from MASSIF to FMO (2022: one equity investment (€32.7 million)).

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 2023, FMO received a fixed remuneration for services rendered of €9.5 million (2022: €9.3 million). In 2023, 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 2023, FMO received a fixed remuneration for services rendered of €3.5 million (2022: €3.9 million). In 2023, no loans and private equity positions were transferred from Access to Energy Fund I and II to FMO (2022: one equity investment (€13.9 million)).

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 2023, the Dutch Government provided €11.7 million for the Land Use Facility, in addition to the aggregate amount of €56.3 million, disbursed in previous years (2022: providing €13.6 million in addition to €42.7 million).

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.

Subsidiaries

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.

Associates and joint ventures

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. Investments are treated as associates or joint ventures when the criteria in the accounting policies are met.

Reference is made to the significant accounting policies and the 'Investments in associates and joint ventures' note for transactions during the year.

During the 2023 financial year FMO made an initial contribution of EUR 13 million in the SDG Loan Fund S.C.A. SICAV SIF. This investment is accounted for as a joint venture. In addition to the initial investment, FMO sold EUR 102 million worth of private sector loans to the fund. The loans were sold based on their outstanding nominal amounts, which is deemed to be an arm's length price for these investments.

Remuneration of the Management Board

General

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 2023 a benchmark review has been conducted by an external consultant. During the 2023 AGM amendments to the remuneration policy were made with respect to indemnity arrangement for former, current and future Management Board members in alignment with standard business practice. Secondly, the number and duration of possible re-appointments of Management Board members has been amended. Depending on the outcome of a recent policy review amendments may be proposed during the 2024 AGM.

Changes in Management Board

The board consists of five functions: a Chief executive officer, two Co-Chief Investment Officers, a Chief Risk Officer and a Chief Finance & Operations Officer. In 2023, the composition of the board has not changed.

All 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.

Remuneration package

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 2023 are provided below.

Fixed salary remuneration

As per January 1, 2023 the maximum salary cap-applicable to the CEO increased by 3.5% and per July 1, 2023 by 1% (in conformity with the structural salary adjustment of the collective labor agreement, CLA Banks) to €314k (2022: €300k). During 2023, the fixed remuneration for the CEO was equal to the maximum cap. For the other members of the Management Board this salary cap was €267k and for Directors the salary cap was €230k (as per July 1, 2023). In the future only structural salary adjustments as indicated by the CLA Banks will be applicable to the salary caps.

Variable compensation

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).

Pension arrangements

FMO offers all its employees, including members of the Management Board, a defined contribution pension scheme. For pensionable salary up to the applicable threshold, which for 2023 amounted to €129k, 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.

Other benefits

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.

Tenure

Management Board members can serve two terms of four years and thereafter - by exception only - two extra reappointments of two years can be possible.

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, ending in October 2025 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). Mr. Jongeneel is serving in his first term, which ends in September 2025. Ms. Vossen and Mr. Maila started in their first term in 2022, per 1 September and 1 December respectively. 

Remuneration ratios

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 0.28 (2022: 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, 2023, the Management Board consisted of five statutory members (2022: five). The total remuneration of the Management Board in 2023 amounts to €1,635k (2022: €1,112k) and is specified as follows:

Because the number of Management Board members has been extended in 2022 the total numbers are not comparable with the 2023 numbers.

Except for pensions of €184k (2022: €133k) 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: