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Long-term incentive compensation  is based on the following indicators. 

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Long-term incentive compensation is based on performance over a three-year period during which the terms and conditions of the long-term incentive compensation plan remain unchanged. A three-year target is set for each indicator. At the end of the three- year period, a comparison is made between the targets and actual performance, and long-term incentive compensation is calculated accordingly. At an aggregate level, payments are made as follows: 

■ 50% of the maximum long-term incentive compensation if the threshold target is reached. 

■ 80% if the pre-determined performance targets are met. 

■ Up to 100% if the targets are exceeded. 

## Discretionary adjustments 

AEGON’s Supervisory Board may make adjustments to variable compensation payments as follows: 

■ Should the Supervisory Board decide that AEGON’s short or long-term business is being affected by significant and exceptional circumstances, not reflected in the performance indicators, it may request the company’s Compensation Committee to consider possible adjustments. 

■ The Compensation Committee reviews all circumstances in detail and documents its fi ndings. If its analysis confirms the Supervisory Board’s initial assessment, the Committee will then bring forward a proposal to the Supervisory Board to adjust either short or long-term incentive compensation. 

■ To reflect such exceptional circumstances, variable compensation may be adjusted within a range of between 75% and 125% of the original entitlement, but may not exceed 100% of the maximum. 

■ Discretionary adjustments may not be made to fi xed compensation. 

## Circuit breaker 

Short-term incentive compensation is only paid if AEGON N.V. reports a net income for the year. 

## Claw-back provision 

In cases of material financial restatements or individual gross misconduct, AEGON’s Supervisory Board reserves the right to re-claim short-term incentive compensation payments. With regard to long-term incentive compensation, AEGON believes the three-year performance period already provides sufficient scope to identify any potential accounting errors or individual wrongdoing. 

## Pension arrangements 

Members of AEGON’s Executive Board are offered  pension arrangements and retirement benefits in line with local practice in their countries of residence and in line with those provided to executives at other  multinational companies in those countries. Benefits are  similarly offered consistent with Executive Board members’ contractual agreements, local practices and 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. 

1 In 2010, the peer group comprises the following companies: Aviva, AXA, Generali, Hartford Financial Services Group, Legal & General, Manulife Financial, MetLife, Principal Financial Group, Prudential Financial, Prudential Plc, Sun Life Financial, and Zurich Financial Services. 

