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## Ex-post assessment and discretionary adjustments 

The Supervisory Board uses its judgment in the assessment of the outcome of strategic/personal targets to ensure that, taken together, they form a fair reflection of the overall performance of the Board member over the performance period. 

In addition, the Supervisory Board will apply an ex-post risk assessment to deferred payouts of variable compensation to determine whether allocated (that is, unvested) variable compensation should become unconditional (meaning it will vest) or should be adjusted. This ex-post assessment will be based on informed judgment by the Supervisory Board, taking into account significant and exceptional circumstances that are not (sufficiently) reflected in the initially applied performance indicators. 

Implementation of this authority will be on the basis of criteria such as: 

■ Outcome of a re-assessment of the performance against the original financial performance indicators; 

■ Significant downturn in the company’s financial performance; 

■ Evidence of misbehavior or serious error by the participant; 

■ Significant failure in risk management; 

■ Significant changes in the company’s economic or regulatory capital base. 

The Supervisory Board will ask the Compensation Committee to review these criteria in detail at each moment of vesting and document its findings. Based on this analysis, the Committee may then put forward a proposal to the Supervisory Board to adjust unvested variable compensation. Deferred variable compensation may only be adjusted downwards. Ex-post, risk- based assessments concern deferred variable compensation, not fixed compensation. 

## Circuit breaker 

For each performance indicator, variable compensation is only paid if the threshold level set for that performance indicator is reached. 

## Claw-back provision 

Where variable compensation is based upon incorrect data (including non-achievement of performance indicators in hindsight), or in the case of material financial restatements or individual gross misconduct, Aegon’s Supervisory Board will have the right to reclaim variable compensation that has already been paid out or vested. 

## Pension arrangements 

Members of Aegon’s Executive Board are offered pension arrangements and retirement benefits in line with local practices in their countries of residence and the provision of the same to executives at other multinational companies in those countries. Similarly, benefits are offered consistent with Executive Board members’ contractual agreements, local practices and 

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comparable arrangements at other multinationals. Aegon does not grant Executive Board members personal loans, guarantees or the like, unless in the normal course of business and on terms applicable to all employees, and only with the approval of the company’s Supervisory Board. 

## Terms of employment 

Members of the Executive Board are appointed for four years, and may then be re-appointed for successive mandates also for a period of four years. 

Mr. Wynaendts has a contract of employment with Aegon N.V.. Mr. Button has been appointed after the new law on supervision (‘Wet Bestuur en Toezicht’) came in to force in January 2013. Therefore a ‘Board Agreement’ was agreed between him and Aegon NV, rather than a contract of employment. Seperately, his employment by Transamerica Life Insurance continues, whilst he is seconded on an expatriate assignment to the Netherlands. 

Members of the Executive Board may terminate their employment with a notice period of three months. If Aegon wishes to terminate the employment of a member of its Executive Board, then the company must give six months’ notice. 

The employment arrangements with current members of the Executive Board contain provisions entitling them to severance payments, should their employment be terminated as a result of a merger or takeover. The Supervisory Board has taken appropriate steps to ensure the contractual arrangements of members of the Executive Board are in line with the Executive Board Remuneration Policy. 

## Executive Board Remuneration Report 1 

At the end of December 2013, Aegon’s Executive Board had two members: 

■ Alexander R. Wynaendts, Chief Executive Officer and Chairman of the Executive Board. Mr. Wynaendts was appointed member of the Executive Board in 2003 for four years, and re-appointed in 2007. At the General Meeting of Shareholders in 2011, Mr. Wynaendts was re-appointed for another four years. 

■ Darryl D. Button, Chief Financial Officer and member of the Executive Board. Mr. Button was appointed member of the Executive Board for four years at the annual General Meeting of shareholders on May 15, 2013. Mr. Button succeeded Mr. Nooitgedagt as Chief Financial Officer and member of Aegon’s Executive Board. 

## Fixed compensation 

The fixed compensation of the Executive Board members remained unchanged in 2013. 

