Corporate governance

Compliance with the Dutch Corporate Governance Code (the 'Code')

BinckBank is required to provide information in the annual report on compliance with the principles and best-practice provisions of the Code relating to the Management Board or Supervisory Board of the company. If the company has not complied with the principles or best-practice provisions or does not intend to comply in the current and subsequent financial year, it must state the reasons in the annual report. This section explains which of the best-practice provisions of the Code BinckBank does not comply with and the reasons for and extent of its non-compliance.

Remuneration

Best-practice provision II.2.10 of the Code specifies the information to be provided by the Supervisory Board in its overview of the remuneration policy planned for the next financial year and subsequent years.

BinckBank complies with this best-practice provision if and to the extent that it does not relate to information which relates to the company's competitive position, such as financial and commercial targets. The Management Board and Supervisory Board do not consider it to be in the interests of the company or its stakeholders to disclose such information. The same reservation applies to publication of the main elements of contracts between Management Board members and the company immediately they are signed, as required by best-practice provision II.2.11 of the Code, if and to the extent that this relates to market-sensitive information.

Stock options/shares

Best-practice provision II.2.3 of the Code treats the allocation of shares for no financial consideration as a form of variable remuneration. According to the Code, the purpose of a variable element should be to reinforce the Management Board members' long-term commitment to the company and the furtherance of its interests. According to the Code, this can be achieved by requiring Management Board members who are allocated shares for no financial consideration to undertake to retain them for at least five years or until termination of their employment. Since these shares are allocated for no financial consideration, the best-practice provision requires that allocation be dependent on the achievement of clearly quantifiable and challenging targets, which have been defined in advance. The performance criteria must be stated in the remuneration report.

Strictly speaking, BinckBank does not award shares or stock options. Instead it awards variable remuneration in the form of phantom shares. The performance criteria are clearly quantifiable and challenging, being based on a comparison in terms of total shareholder return with comparable companies (peer group), and require BinckBank to achieve above-average performance over a three-year period. In our view, the requirement to hold the shares for at least five years or until termination of employment is inconsistent with the term of office of Management Board members (four years) and does not take account of the pace of economic change. We consider three years to be sufficient to safeguard adequately the medium-term interests of the company and its shareholders.

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Regulations embodying rules on the ownership of and transactions in securities by Management Board members other than those issued by their 'own' company

One of the recommendations of best-practice provision II.2.6 of the Code is that the Supervisory Board should adopt regulations embodying rules on the ownership of and transactions in securities by Management Board members other than those issued by their 'own' company. These regulations should be posted on the company's website.

BinckBank complies with this best-practice provision, but for practical reasons has integrated these regulations into the Management Board regulations. The regulations have therefore been adopted indirectly by the Supervisory Board and the requirements of best-practice provision II.2.6 of
the Code have been met.

Suspension/dismissal

According to best-practice provision IV.1.1 of the Code, it must be possible for a resolution to dismiss a member of the Management Board or Supervisory Board to be adopted by an absolute majority of the votes cast, but it may be made a condition that this majority represents a given proportion of the issued capital, which may not exceed one-third.

Pursuant to BinckBank's Articles of Association, a resolution of the General Meeting to suspend or dismiss a member of the Management Board or Supervisory Board requires a majority of at least two-thirds of the votes cast, representing more
than half of the issued capital.

Best-practice provision IV.1.1 of the Code will be implemented when the Articles of Association are next amended. In the interim, the members of BinckBank's Management Board and Supervisory Board have adopted this best-practice provision and compliance is thus assured. The members of BinckBank's Management Board and Supervisory Board have also, on a purely voluntary basis, consented to comply with the majority and quorum requirements of this best-practice provision in respect of any resolution of the General Meeting
to suspend them.

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