Aegon Ltd. · EURONEXT:AGN
Aegon — Shareholder Meeting (May 2020)
75 slides from Aegon's shareholder meeting presentation, May 15, 2020
Slide 1: Welcome – Welkom
Welcome – Welkom Annual General Meeting of Shareholders Algemene Vergadering van Aandeelhouders The Hague, May 15, 2020 Helping people achieve a lifetime of financial security
Slide 2: William L. Connelly
William L. Connelly Chairman of the Supervisory Board Voorzitter van de Raad van Commissarissen 2
Slide 3: Welcome to the Annual General Meeting of Shareholders
Welcome to the Annual Welkom bij de jaarlijkse General Meeting of Algemene Vergadering van Shareholders Aandeelhouders 3
Slide 4: Opening
Agenda item 1 │ Agendapunt 1 Opening Opening This item will not be voted upon / Over dit agendapunt wordt niet gestemd 4
Slide 5: Business overview 2019
Agenda item 2 │ Agendapunt 2 2019 Presentatie over de gang Business overview van zaken in 2019 This item will not be voted upon / Over dit agendapunt wordt niet gestemd 5
Slide 6: Living up to our purpose in testing times
Living up to our purpose in testing times Alex Wynaendts CEO & Chairman of the Executive Board The Hague, May 15, 2020 Helping people achieve a lifetime of financial security
Slide 7: Today’s storyline
Today’s storyline • Impact of COVID-19 - People - Customers - Operations - Financials • Briefly looking back on 2019 - Focus on growth and capital - Active portfolio management - Financial highlights • Living up to our purpose 7
Slide 8: We are living in testing times
We are living in testing times With huge impact on customers and employees • COVID-19 impacts: - People - Operations - Customers - Financials • Main responsibilities: - Ensuring safety of our employees - Fulfilling promises to our customers by maintaining strong capital position - Supporting our com
Slide 9: Our response to COVID-19 crisis
Our response to COVID-19 crisis Health and safety of employees primary responsibility; continued operations • Crisis management • Continuity of critical services ensured − Effective crisis management governance in − While working from home place; global guidance – local implementation • Business con
Slide 10: Our response to COVID-19 crisis
Our response to COVID-19 crisis Providing guidance and financial relief to our customers • Ensuring uninterrupted customer service − Increased customer appraisal • No material pandemic exclusions • Providing premium payment and fee − After outbreak, COVID-19 coverage flexibility included in critical
Slide 11: Our response to COVID-19 crisis
Our response to COVID-19 crisis Supporting our communities • Our businesses responded with local initiatives for immediate support - For a total of over EUR 1 million to date - Initiatives include: US: providing protective gear UK: dedicated corporate NL: support healthcare workers Asia: supporting
Slide 12: Execution of strategy in 2019
Execution of strategy in 2019 • Environment remained challenging - Persistent low interest rates in our key markets - Customers impacted by economic uncertainty - Growing need for solidarity and financial security • Further simplified our organization - Reorganization of US businesses - Aegon Intern
Slide 13: Continued focus on growth and capital in 2019
Continued focus on growth and capital in 2019 • Improved commercial momentum while we continued to invest in customer services − Increase in Life, Accident & Health sales and gross deposits during the year • Capturing opportunities in fast-growing markets − Financial protection and investment manage
Slide 14: Successfully optimizing our portfolio
Successfully optimizing our portfolio Underlying earnings before tax (in EUR million, FY2019) Manage for Value Drive for Growth • Reinsured a quarter of longevity risk in • Positive momentum in Life and Accident the Netherlands & Health sales, as well as gross deposits • New own employee pension pla
Slide 15: Purpose more relevant than ever before
Purpose more relevant than ever before As already recognized 175 years ago Helping people achieve a lifetime of Purpose financial security • Strategic transformation Transformation • Financial transformation • Organizational & cultural transformation Financial • Solid balance sheet strength • Strong
Slide 16: Annual Report and Annual Accounts 2019
Agenda item 3 │ Agendapunt 3 Annual Report and Jaarverslag en Annual Accounts 2019 jaarrekening 2019 16
Slide 17: Reports of the Boards for 2019
Agenda item 3.1 │ Agendapunt 3.1 Reports of the Boards Verslagen van de for 2019 Raad van Bestuur en de Raad van Commissarissen over 2019 This item will not be voted upon / Over dit agendapunt wordt niet gestemd 17
Slide 18: Our financial performance in 2019
Our financial performance in 2019 Matt Rider CFO & Member of the Executive Board The Hague, May 15, 2020 Helping people achieve a lifetime of financial security
Slide 19: Today’s storyline
Today’s storyline • Financial highlights 2019 • Key performance indicators 1Q 2020 • Balance sheet preservation • Target outlook 19
Slide 20: Financial highlights 2019
Financial highlights 2019 IFRS Capital position Capital generation and per year-end dividend Underlying earnings Group solvency ratio Capital generation1 EUR 1,973 million 201% EUR 1,569 million -5% compared with 2018 -10pp compared with 2018 +12% compared with 2018 Net income Holding excess cash Gr
Slide 21: Our key performance indicators in 1Q 2020
Our key performance indicators in 1Q 2020 Underlying earnings Net income Normalized capital Group Solvency II Holding excess before tax generation ratio cash € 366 million € 1,270 million € 311 million 208% € 1,379 million 21
Slide 22: Solid capital position in units and at Group level
Solid capital position in units and at Group level Group Solvency II ratio at March 31, 2020 Group Solvency II ratio • Group Solvency II ratio slightly above the target Local solvency ratio by unit range supported by normalized capital Year-end 2019 and 1Q 2020 208% generation 201% 200% • Benefit fr
Slide 23: Protecting the economic value of the balance sheet
Protecting the economic value of the balance sheet Management actions Hedging and Underwriting Capital asset allocation and pricing preservation • Rebalanced macro equity hedge to increase • Variable annuity repricing in 2Q20 to lead to • Legal merger of core US Life entities downside protection and
Slide 24: Focus on maintaining solid financial position despite challenging conditions
Focus on maintaining solid financial position despite challenging conditions Financial position and outlook (March 31, 2020) Group Solvency II ratio Return on Equity target Very unlikely to reach 10% 208% return on equity target in 2020 given the extraordinary circumstances Holding excess cash Other
Slide 25: Reports of the Boards for 2019
Agenda item 3.1 │ Agendapunt 3.1 Reports of the Boards Verslagen van de for 2019 Raad van Bestuur en de Raad van Commissarissen over 2019 This item will not be voted upon / Over dit agendapunt wordt niet gestemd 25
Slide 26: Annual Accounts 2019 and report independent auditor
Agenda item 3.2 │ Agendapunt 3.2 Annual Accounts 2019 and Jaarrekening 2019 en rapport report independent auditor van de onafhankelijke accountant This item will not be voted upon / Over dit agendapunt wordt niet gestemd 26
Slide 27: Gert-Jan Heuvelink
Gert-Jan Heuvelink 15 May 2020
Slide 28: Presentation by PwC
Presentation by PwC 15 May 2020
Slide 29: Audit of Aegon’s 2019 Financial Statements
Audit of Aegon’s 2019 Financial Statements • Audit opinion (refer to pages 328 to 336 of the Annual Report) • Materiality • Scope of our group audit • Risk of fraud and non-compliance with laws and regulations • Key audit matters: – Valuation of certain assets and liabilities arising from insurance
Slide 30: Annual Accounts 2019 and report independent auditor
Agenda item 3.2 │ Agendapunt 3.2 Annual Accounts 2019 and Jaarrekening 2019 en rapport report independent auditor van de onafhankelijke accountant This item will not be voted upon / Over dit agendapunt wordt niet gestemd 30
Slide 31: Remuneration Report 2019
Agenda item 3.3 │ Agendapunt 3.3 Remuneration Report 2019 Remuneratierapport 2019 This item will be subject to an advisory vote / Over dit agendapunt wordt een adviserende stem uitgebracht 31
Slide 32: Ben Noteboom
Ben Noteboom Chairman of the Remuneration Committee Voorzitter van de Remuneratie Committee 32
Slide 33: Supervisory Board Remuneration Policy 2019
Supervisory Board Remuneration Policy 2019 2019 Supervisory Board fees Fees Scope Amount (in EUR) Base Fee Supervisory Board membership 80,000 per year – Chairman 50,000 per year – Vice-Chairman 40,000 per year – Members Risk or Audit Committee membership 13,000 per year – Chairman 8,000 per year –
Slide 34: Supervisory Board remuneration in 2019
Supervisory Board remuneration in 2019 Remuneration received in 2019 In EUR thousands Base Fee Attendance Fee Travel Fee Total Connelly 95 54 20 169 Ellman 56 39 20 115 Noteboom 58 39 6 103 Van der Veer 58 54 6 118 Wortmann – Kool 63 54 6 123 Young 66 66 26 158 Dineen* 40 27 12 79 Total 436 333 96 8
Slide 35: Executive Board Remuneration Policy 2019
Executive Board Remuneration Policy 2019 Compensation and benefit overview Component Details Fixed compensation Paid in monthly installments Variable compensation Target/maximum: 80%/100% of fixed compensation Pay-out: • 40% upfront • 60% deferred, tranche vesting over 3-yr period (3x 20%) • Each po
Slide 36: Executive Board remuneration in 2019
Executive Board remuneration in 2019 Remuneration received in relation to 2019 In EUR thousands Fixed Variable** Pension Benefits Total Wynaendts* 1,314 1,048 1,302 252 3,916 Rider 931 743 373 77 2,124 Total 2,245 1,791 1,675 329 6,040 * Pension Mr. Wynaendts: includes Jan-May end of term arrangemen
Slide 37: Executive Board variable compensation in 2019
Executive Board variable compensation in 2019 2019 Aegon results for calculation Executive Board variable compensation 37
Slide 38: Executive Board variable compensation in 2019 (cont’d)
Executive Board variable compensation in 2019 (cont’d) 2019 results Mr. Wynaendts for variable compensation calculation 38
Slide 39: Executive Board variable compensation in 2019 (cont’d)
Executive Board variable compensation in 2019 (cont’d) 2019 results Mr. Rider for variable compensation calculation 39
Slide 40: Executive Board remuneration in 2020
Executive Board remuneration in 2020 Annualized remuneration levels per January 2020 In EUR thousands Fixed Variable Pension Total Wynaendts 1,327 Target: 80% 40% Target: 3,318 + 2% allowance* Max: 100% + 28%* Max: 3,584 Friese ** 1,485 Target: 80% 40% Target: 3,267 Max: 100% Max: 3,564 Rider 941 Ta
Slide 41: Remuneration Report 2019
Agenda item 3.3 │ Agendapunt 3.3 Remuneration Report 2019 Remuneratierapport 2019 This item will be subject to an advisory vote / Over dit agendapunt wordt een adviserende stem uitgebracht 41
Slide 42: Adoption of the Annual Accounts 2019
Agenda item 3.4 │ Agendapunt 3.4 Adoption of the Vaststelling van de Annual Accounts 2019 jaarrekening 2019 42
Slide 43: Dividend
Agenda item 3.5 │ Agendapunt 3.5 Dividend Dividend This item will not be voted upon / Over dit agendapunt wordt niet gestemd 43
Slide 44: Dividend
Dividend • In its Annual Report 20191), Aegon proposed a final 2019 dividend of EUR 0.16 per common share and EUR 0.004 per common share B, absent further deterioration of the market circumstances, and based on the assessments made at that time • Subsequently, Aegon decided to forego the 2019 final
Slide 45: Dividend
Agenda item 3.5 │ Agendapunt 3.5 Dividend Dividend This item will not be voted upon / Over dit agendapunt wordt niet gestemd 45
Slide 46: Release from liability
Agenda item 4 │ Agendapunt 4 Release from liability Kwijting 46
Slide 47: Release from liability for the members of the Executive Board
Agenda item 4.1 │ Agendapunt 4.1 Release from liability for the Verlenen van kwijting aan de members of the leden van de Raad van Bestuur Executive Board for their duties voor de uitoefening van hun performed during 2019 taak in 2019 47
Slide 48: Release from liability for the members of the Supervisory Board
Agenda item 4.2 │ Agendapunt 4.2 Release from liability for the Verlenen van kwijting aan de members of the leden van de Raad van Supervisory Board for their Commissarissen voor de duties performed during 2019 uitoefening van hun taak in 2019 48
Slide 49: Remuneration
Agenda item 5 │ Agendapunt 5 Remuneration Remuneratie 49
Slide 50: Ben Noteboom
Ben Noteboom Chairman of the Remuneration Committee Voorzitter van de Remuneratie Committee 50
Slide 51: Adoption of the Remuneration Policy for members of the Executive Board
Agenda item 5.1 │ Agendapunt 5.1 Adoption of the Remuneration Vaststelling van het Policy for members of the remuneratiebeleid voor de Executive Board leden van de Raad van Bestuur 51
Slide 52: Proposed Executive Board Remuneration Policy
Proposed Executive Board Remuneration Policy Main change 1: Increase alignment with shareholders by increasing shares in pay-mix Component Current Proposed Pay-mix of variable compensation 33.33% 50% in cash in cash 66.67% 50% in Aegon in Aegon shares shares 52
Slide 53: Proposed Executive Board Remuneration Policy (cont’d)
Proposed Executive Board Remuneration Policy (cont’d) Main change 2: Simplification by moving from tranche-vesting to cliff-vesting Component Current Proposed Vesting schedule of Yr 0 +1 +2 +3 +4 +5 +6 Yr 0 +1 +2 +3 +4 +5 variable compensation 20% 33.3% 20% 3 years 10% 10% 3 years 10% 66.7% 2 years
Slide 54: Proposed Executive Board Remuneration Policy (cont’d)
Proposed Executive Board Remuneration Policy (cont’d) Main change 3: Increase long-term focus with introduction 3-year performance period Component Current Proposed Performance period • 1 year for all indicators • 3 years for at least 20% of indicators • 1 year for all other indicators Illustration
Slide 55: Proposed Executive Board Remuneration Policy (cont’d)
Proposed Executive Board Remuneration Policy (cont’d) Main change 4: Increase transparency and stakeholder alignment with mandatory categories Component Current Proposed Performance indicator • ≥ 50% non-financial (by law) • ≥ 50% non-financial (by law) mix • Mandatory performance indicator categori
Slide 56: 2020 Executive Board performance indicators
2020 Executive Board performance indicators Based on proposed policy changes 2019 performance indicators 2020 performance indicators Category Performance indicators Mandatory category Performance indicators Aegon Net Deposits Shareholders Relative TSR financial Normalized Capital Generation Capital
Slide 57: Proposed Executive Board Remuneration Policy (cont’d)
Proposed Executive Board Remuneration Policy (cont’d) Summary of main remuneration elements Component Details Total remuneration • Internal references: Management Board and general employee level population • External references: market trends, inflation, European insurance peer group, Dutch AEX pee
Slide 58: Adoption of the Remuneration Policy for members of the Supervisory Board
Agenda item 5.2 │ Agendapunt 5.2 Adoption of the Remuneration Vaststelling van het Policy for members of the remuneratiebeleid voor de Supervisory Board leden van de Raad van Commissarissen 58
Slide 59: Proposed Supervisory Board Remuneration Policy
Proposed Supervisory Board Remuneration Policy Main policy changes Component Current Proposed Fees • 2019 fee • No change to 2019 Fee levels levels • Option to index the Fees each year for economic developments (e.g. inflation) • Any Fee change exceeding this level or change in the scope of a Fee, s
Slide 60: Remuneration
Agenda item 5 │ Agendapunt 5 Remuneration Remuneratie 60
Slide 61: Composition of the Supervisory Board
Agenda item 6 │ Agendapunt 6 Composition of the Samenstelling van de Supervisory Board Raad van Commissarissen 61
Slide 62: Appointment of Mr. Thomas Wellauer as member of the Supervisory Board
Agenda item 6.1 │ Agendapunt 6.1 Appointment of Mr. Thomas Benoeming van de heer Wellauer as member of the Thomas Wellauer als lid van de Supervisory Board Raad van Commissarissen 62
Slide 63: Thomas Wellauer
Thomas Wellauer • Age: 64 • Nationality: Swiss • Main occupation - Non-executive director • Main former occupation - COO of Swiss Re • Membership of other Boards - Chairman of the Board of Directors of SIX (non-listed) - Chairman of the Board of Trustees of the University Hospital Zurich Foundation
Slide 64: Appointment of Mr. Thomas Wellauer as member of the Supervisory Board
Agenda item 6.1 │ Agendapunt 6.1 Appointment of Mr. Thomas Benoeming van de heer Wellauer as member of the Thomas Wellauer als lid van de Supervisory Board Raad van Commissarissen 64
Slide 65: Appointment of Mrs. Caroline Ramsay as member of the Supervisory Board
Agenda item 6.2 │ Agendapunt 6.2 Appointment of Mrs. Caroline Benoeming van mevrouw Ramsay as member of the Caroline Ramsay als lid van de Supervisory Board Raad van Commissarissen 65
Slide 66: Caroline Ramsay
Caroline Ramsay • Age: 57 • Nationality: British • Main occupation - Senior finance and audit roles in Financial Services • Main former occupation - Group Chief Auditor of RSA plc. • Membership of other Boards - Non-Executive Audit Committee Chair of Brit Syndicates Ltd. (non-listed) - Non-Executive
Slide 67: Appointment of Mrs. Caroline Ramsay as member of the Supervisory Board
Agenda item 6.2 │ Agendapunt 6.2 Appointment of Mrs. Caroline Benoeming van mevrouw Ramsay as member of the Caroline Ramsay als lid van de Supervisory Board Raad van Commissarissen 67
Slide 68: Composition of the Executive Board
Agenda item 7 │ Agendapunt 7 Composition of the Samenstelling van de Executive Board Raad van Bestuur 68
Slide 69: Appointment of Mr. Lard Friese as member of the Executive Board
Agenda item 7.1 │ Agendapunt 7.1 Appointment of Mr. Lard Friese Benoeming van de heer as member of the Lard Friese als lid van de Executive Board Raad van Bestuur 69
Slide 70: Lard Friese
Lard Friese • Age: 57 • Nationality: Dutch • Shares in the company: - None • Main former occupation: - Chair of the Executive Board and CEO of NN Group • External Board membership that qualify under Act Management and Supervision: - None 70
Slide 71: Appointment of Mr. Lard Friese as member of the Executive Board
Agenda item 7.1 │ Agendapunt 7.1 Appointment of Mr. Lard Friese Benoeming van de heer as member of the Lard Friese als lid van de Executive Board Raad van Bestuur 71
Slide 72: Cancellation, issuance, and acquisition of shares
Agenda item 8 │ Agendapunt 8 Cancellation, issuance, and Intrekking, uitgifte en verkrijging acquisition of shares van aandelen 72
Slide 73: Agenda item 8
Agenda item 8 │ Agendapunt 8 Proposal to cancel common shares and common Voorstel tot intrekking van gewone aandelen en 8.1 8.1 shares B gewone aandelen B Authorization of the Executive Board to issue Machtiging van de Raad van Bestuur tot uitgifte 8.2 common shares with or without pre-emptive right
Slide 74: Any other business
Agenda item 9 │ Agendapunt 9 Any other business Wat verder ter tafel komt This item will not be voted upon / Over dit agendapunt wordt niet gestemd 74
Slide 75: Closing
Agenda item 10 │ Agendapunt 10 Closing Sluiting This item will not be voted upon / Over dit agendapunt wordt niet gestemd 75