Annual report 2009 - Dexia.com

Corporate governanceVariable compensationFrom 2009, the Board of Directors decided to apply theprinciples of the Belgian regulations which will be applicablefrom the variable compensation for 2010 to be paid in 2011.These principles are:• a deferment of the variable compensation over threeyears;• a measure of performance over the long term;• an adjustment of the deferred part in the event of poorperformance;• a link of the deferred part with the share price.In relation to performance in 2009 and considering the above,the Board of Directors decided to depart from the principlesapplied in the past in order to align the fixing of the variablecompensation to realisation of the Dexia transformation planand to the involvement of each member of the ManagementBoard in the implementation of that plan.Furthermore, the Board of Directors specified that the variablecompensation for 2009 had to be less than was thepractice before the crisis at the equivalent function level.The reduction applied to members of the Management Boardfor 2009 would be of the same order as that applied to thevariable compensation of the Group 300 top executives (i.e.average reduction by more than one third).Conditions of attribution and paymentof the variable compensationFor 2009, the Board of Directors fixed three conditions forattribution and payment of the variable compensation ofmembers of the Management Board.1. For 2009, the Board of Directors decided that the variablecompensation granted to members of the ManagementBoard of Dexia SA would be subject to the non-renewal ofthe State guarantee on interbank loans and bond issuesbeyond 30 June 2010, in accordance with the undertakingsmade to the European Commission.As a consequence, members of the Management Board willreceive no amount if this condition is not met.In the case of attribution of variable compensation followingthe non-renewal of the State guarantees on interbank loansand bond issues, the following principles will apply.2. On a proposal from the Appointment and CompensationCommittee, on each date of payment of a deferred part, theBoard will check that the performance of the member ofthe Management Board has not deteriorated and that theundertakings made to the European Commission have beenfulfilled.3. The deferred part is indexed to the share price during thatperiod. This indexation permits a close association of theinterest of members of the Management Board and those ofthe shareholders, from a long-term point of view.In order to take account of the penalty suffered by the beneficiariesas a consequence of the non-availability of thedeferred sums, the member of the Management Board maybe entitled to the countervalue of the dividend paid duringthe period of deferment.Deferring variable compensationIn accordance with the above principles, payment of the variablecompensation of members of the Management Boardwill be deferred over three years. The deferred part will bedetermined according to following conditions:• In n+1 (i.e. 2010), the member of the Management Boardwill receive:- for the part from EUR 0 to EUR 50,000: 100%;- for the part from EUR 50,001 to EUR 100,000: 50%;- for the part beyond EUR 100,001: 33%.• The member of the Management Board will receive the balance,according to the conditions described in “Conditionsof attribution and payment of the variable compensation”, inn+2 (i.e. 2011) and n+3 (i.e. 2012).The member of the Management Board must still be in theservice of the Group at the time of payment of the differentamounts due, failing which the deferred parts will be lost,unless a contrary decision is taken by the Board of Directorson the proposal of the Appointment and CompensationCommittee.Application of these principles for 2009The Board of Directors noted that all the targets of the transformationplan were achieved or even exceeded in 2009.The Board recalls that no stock option or free shares weregranted during the year 2009. Similarly, no fixed compensationwas subject to revaluation.Management reportConsolidatedfinancial statementsAnnual financial statementsSUMMARY OF THE VARIABLE COMPENSATION OF MEMBERS OF THE MANAGEMENT BOARDVariable compensation for 2009Amounts granted subject to conditions (see part “Conditions of attribution andpayment of the variable compensation”) by date of possible payment(en EUR) 2010 2011 2012 Total % deferredPierre Mariani 308,333 245,833 245,834 800,000 61%Stefaan Decraene 141,667 79,166 79,167 300,000 53%Pascal Poupelle 141,667 79,166 79,167 300,000 53%Claude Piret 100,000 37,500 37,500 175,000 43%Philippe Rucheton 141,667 79,166 79,167 300,000 53%The percentages of deferred compensation are within the high range of the recommendations of good governance (FinancialStability Board).Additional informationAnnual report 2009 Dexia 41