ING Groep N : 2024 Proposed Remuneration Policy Executive Board

ING Groep N.V. Remuneration Policy

Executive Board April 2024

Index
1. Introduction	3
1.1 Purpose and strategy	3
1.2 Stakeholder engagement	4
1.3 Summary of proposed changes	6
2. Executive Board remuneration	7
2.1	Remuneration policy - key principles	7
2.2	Market perspective	7
2.3 Remuneration components	8
2.4 Choice of performance measures and targets	11
2.5	Performance and risk review	12
2.6	Illustrative overview of our variable remuneration approach	13
3. Contractual arrangements	14
3.1 Tenure	14
3.2 Recruitment approach	14
3.3	Termination	15
4. Governance	17
4.1	Periodic review	17
4.2 Implementation	17
4.3	Supervisory Board discretion	18
4.4 Policy changes and derogation	18
4.5	Grandfathering	18

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1. Introduction

As a bank we play an important role for the economies and communities we operate in and the clients we serve and support.1 That role comes with the responsibility to deliver long term value to all our stakeholders and ensure that we remain a successful and resilient bank. In order to do this in the optimal way, we need the right strategy, organisation and brand position wherever we operate and we need to be able to attract and retain the right skills and expertise at all levels of the organisation.

ING's remuneration policies are aimed at enabling us to attract and retain a diverse population of leaders with the necessary ability, skills, experiences and values and to ensure that their compensation reflects the roles, responsibilities and workloads of their jobs. The policies aim to balance short- and long term interests and reward non-financial performance as well as financial performance. The policies are designed to reward performance in ING's strategic pillars of providing a superior customer experience and putting sustainability at the heart. This includes linking non-financial performance to the delivery of our sustainability and broader ESG goals. Our objective is to ensure that the remuneration policy is designed and implemented in a gender-neutral manner. Our Executive Board remuneration approach also aims to ensure that changes in the level and composition of remuneration are managed in a balanced manner.

ING competes in a global market for talent. We are a listed company, operating in the highly regulated financial industry. Because of the important role we play for the economy and society, senior leaders need to meet high standards in terms of experience and need regulatory approval, which in combination with the limitations on compensation set by Dutch regulation reduces the pool of available candidates and intensifies the competition. In practice, our most relevant competition on the labour market consists of large European banks and other leading corporates and financial services companies. This context is further explained in paragraph 2.2 Market perspective.

This document presents the remuneration policy for the Executive Board as proposed to the Annual General Meeting ("AGM") of ING's shareholders for adoption in April 2024. In preparing this policy, we have taken stakeholder views into consideration, which have been actively sought. Once adopted by the General Meeting, the Executive Board remuneration policy will be effective retroactively from 1 January 2024 until the 2028 AGM at the latest. This policy will, once adopted, be presented in full on ING's corporate website.

1.1 Purpose and strategy

ING is a leading European universal bank with global activities. We are headquartered in the Netherlands, which is also our biggest market. Our more than 60,000 employees serve over 38 million retail customers in 10 countries with payments, lending and savings and investment products as well as thousands of corporates and financial institutions in over 100 markets with Wholesale Banking products.

Our purpose is empowering people to stay a step ahead in life and in business. This purpose is founded on the belief that ING's role as a financial institution is to support and promote economic, social and environmental progress, and at the same time generate healthy returns for shareholders. ING's strategy is built around our purpose and making the difference for people and the planet. We do this by providing a superior customer experience and putting sustainability at the heart of what we do.

Customers expect an experience that is personal, easy, relevant and instant. For individual customers and small businesses, ING's emphasis is predominantly on mobile banking, while for mid-corporate and Wholesale Banking clients it is all about personal relationships, and superior sector and network

1 On 1 January 2023, the Act on further remuneration measures for the financial sector (Wet nadere beloningsmaatregelen financiële ondernemingen, the "Wnbfo") entered into force. The Wnbfo introduced - among other things - a statutory obligation for financial undertakings to consider and report on its remuneration policy in relation to the company's social function and how remuneration is determined.

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expertise supported by seamless digital delivery. At every step of their ING journey, customers should feel an emotional connection with us. Banking is a relationship just like any other, and the best relationships are those in which people feel valued, confident, empowered and in control.

We also have a responsibility to society to define new ways of doing business that align with economic growth and social impact. We are determined to be a banking leader in building a sustainable future for customers, society and the environment. We lead by example by striving for net zero in our own operations. We play our part in the low-carbon transformation that is necessary to achieve a sustainable future, steering financing towards meeting global climate goals and working with clients to achieve their own sustainability goals. And we manage the most relevant environmental and social risks.

To fulfil our strategic ambitions, we have four enabling priorities: providing seamless, digital services, using scalable technology and operations, staying safe and secure and unlocking our people's full potential. With this last priority we emphasize that we want all ING employees to have the skills and capabilities to equip them for the future. We also want to provide them with an excellent employee experience and promote a culture which embraces diversity, inclusion and vitality where everyone feels they belong.

Our Orange Code describes ING's values - honest, prudent, responsible - and the behaviours that set us apart: take it on and make it happen, help others to be successful, and always be a step ahead. These are the commitments ING employees make to each other and the standards by which performance is measured.

The ING Global Code of Conduct builds on the Orange Code and sets out ten core principles for conduct. The principles are based on ING's existing policies and underlying internal control documents and help ING to be safe, secure and compliant and ultimately safeguard customers, society and the entire financial system. At the beginning of each year, all employees are requested to sign off on the Global Code of Conduct to acknowledge that they are familiar with the principles of the Global Code of Conduct and are aware of the conduct expected of them.

To attract and retain the right talent, we operate a robust performance management process including an assessment based on job targets and Orange Behaviours (the 'how') and these elements together with the targetcards (see paragraph 2.4 Choice of performance measures and targets) are used to inform remuneration proposals. The process is designed to steer and motivate all staff, including Executive Board members, to deliver on ING's strategic priorities, aiming to reward success and prevent rewarding for failure.

1.2 Stakeholder engagement

ING recognises that remuneration is an area of particular interest to stakeholders including shareholders, employees and customers - especially considering ING's position in society as the largest Netherlands-based bank. Stakeholders have different, sometimes conflicting, opinions on remuneration. The Supervisory Board is fully committed to ensuring that our approach to remuneration achieves a balance of interest across different stakeholders.

Based on experiences with the 2020 Executive Board and Supervisory Board remuneration policies and taking into account stakeholder conversations over the last few years, the Supervisory Board, in consultation with advisory bodies, conducted a review in 2023 and 2024 to come to an updated version of the policy, proposed to shareholders at the 2024 AGM. This review was aimed to balance factors including the interest of ING to be able to attract, motivate and retain leaders with the ability, experience, skills, values and behaviours to meet our strategic priorities: the interest of Executive Board members to receive fair, consistent and balanced remuneration; and the interest of various internal and external stakeholders whose trust in ING is essential for its functioning.

The Supervisory Board and employee representative bodies regularly discuss how the Executive Board remuneration policy aligns with wider remuneration within ING. In line with various regulations, in the

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process of formulating the remuneration policy, the Supervisory Board consulted a broad group of stakeholders, representing regulators, shareholders, employees and customers and society at large. Based on a first draft of the remuneration policy, the chair of the Supervisory Board and the Remuneration Committee, supported by ING staff members, held a series of meetings and conference calls to gather information and feedback. These included meetings with the Dutch Central Works Council, the Advisory Council of ING Netherlands and regulatory and governmental authorities including the Dutch Central Bank (De Nederlandsche Bank) and European Central Bank. At the time of stakeholder engagement a number of ING Group's largest institutional shareholders, together holding approximately 23% of ING Group's share capital, were consulted as well as proxy advisory firms and Dutch shareholder advocacy groups. A specialised market research firm conducted a qualitative study among Dutch retail customers. Through our engagement with the Dutch Central Works Council, representing around 14.500 employees in the Netherlands, and the qualitative study among Dutch customers, we have sought the perspectives of (Dutch) society at large on our remuneration policy. The views of the current members of the Executive Board were also sought.

Insights gained from the stakeholder engagement process have contributed to the outcomes of the proposed updates to the remuneration policy. The Supervisory Board highly appreciates the participation of our stakeholders and the meaningful insights they provided. Most stakeholders also expressed their appreciation of the engagement process. Views on various elements of executive remuneration among the stakeholders vary widely.

The main themes that were discussed by most stakeholders during the consultation regarding the Executive Board remuneration policy and our responses were the following:

One of the key feedback items we received from our stakeholders during the stakeholder engagement process regarding the proposed updated remuneration policies was the need for enhanced transparency around how Environmental, Social & Governance (ESG) matters are integrated into the Executive Board remuneration policy, especially in the context of rapidly evolving developments for regulators and shareholders. ING's selection of ESG measures are to support delivery of our ESG objectives and align to regulatory expectations, both in terms of current and upcoming developments, see paragraph 2.4 Choice of performance measures and targets. We will continue to review and expand on our sustainability measures with more reach and aim to set targets for scope 3 emissions. We will take a more data-driven approach where we will disclose retrospectively enhanced substantiation of non-financial performance on a quantitative and qualitative basis each year for the Executive Board members. In addition we will continue to refine, adjust and enhance the robustness of our target-setting and performance assessment approach for the purposes of variable remuneration determination for the Executive Board members.

Stakeholders also suggested that ING should disclose more quantifiable non-financial metrics on an ex- ante or, at least, ex-post basis. ING has both quantifiable and qualitative targets for non-financial measures, which supports a balanced performance assessment against these measures. Year-on-year ING aims to continue to progress towards more quantifiable non-financial performance targets, which are always disclosed for the Executive Board members in the relevant remuneration report on an ex- post basis. There are commercial sensitivities that prohibit ING from disclosing the targets on an ex- ante basis.

Furthermore, the Supervisory Board has become increasingly concerned that, over time, the actual total direct compensation of our Executive Board members has fallen behind our desired pay policy stance and positioning against our peer group. This is supported by the benchmark results for comparable roles in organisations similar in size, operating in similar geographies, and with whom we compete for talent, see paragraph 2.2 Market perspective. We will keep the issue on appropriate market pay positioning of our Executive Board members under review.

Overall, the Supervisory Board thinks it has again been able to find a balance between the various viewpoints and interests, addressing stakeholders' preferences, remarks and concerns regarding the Executive Board remuneration policy.

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1.3 Summary of proposed changes

The following policy changes are proposed to the existing policy from 2020:

	Subject		Proposed change
	Peer group	▪ Maintain peer group guiding principles and increase sample from 16 to 20
			companies by including two UK banks (maximum of 10% of peer group) and
			two additional European banks to align with ING's international profile and
			executive talent markets.
	Variable remuneration	▪ Increased flexibility in the weighting of internal functional performance for
			the CRO (i.e. at least 75% on internal functional objectives) and in the
			weighting of Group vs. business line performance for the CFO (i.e. at least
			50% on Group) to align with regulations;
			▪ Increased flexibility to select ex-ante risk measures in the targetcards to be in
			line with prevailing financial risk and non-financial risk targets in the relevant
			performance year;
			▪ For holdback and clawback, a more transparent non-exhaustive list of
			triggers for holdback and clawback is presented to also align with
			requirements pursuant to the Dodd-Frank Act.
	Supervisory Board	▪ Provide greater transparency of existing SB discretionary powers on
	discretion	performance and variable remuneration.
	Treatment of leavers	▪ Provide greater transparency of remuneration decision-making on loss of
			office / leaver circumstances in a table format.

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2. Executive Board remuneration

This section sets out the key principles and elements of the remuneration policy for the Executive Board and explains how we have considered peer group selection. Details on the Executive Board remuneration outcomes will be disclosed each year in the Remuneration Report embedded in ING Group's Integrated Annual Report.

2.1 Remuneration policy - key principles

The Supervisory Board is responsible for determining the Executive Board remuneration policy. The key principles used to determine the Executive Board remuneration policy aim to balance various stakeholder perspectives and are as follows:

• Consistency with ING's strategy and promote sound and effective risk management;
• Being able to attract, motivate and retain leaders with the ability, experience, skills, values and behaviours to fulfil our role as a global bank;
• The interest of Executive Board members to receive fair, consistent and balanced remuneration;
• Maintaining a sustainable balance between short and long-term interests of our clients, shareholders, employees, society at large and other stakeholders and encouraging sustainable long-term value creation;
• Complying with all applicable regulatory requirements.

2.2 Market perspective

In compliance with the Dutch Banking Code, ING aims for the total direct compensation2 of members of the Executive Board to be below the median when benchmarked against comparable positions inside and outside the financial industry, taking into account the relevant international context.

The peer group of ING in this context is based on five guiding principles: size, governance framework, geography, relevant talent market and a balancing factor:

Size	ING acknowledges the importance of including companies that are broadly
	comparable in terms of size and complexity
Governance	ING is subject to the Dutch (financial services) regulatory framework and
framework	operates within a Dutch stakeholder environment
Geography	ING is a leading European universal bank with a global presence and is
	headquartered in the Netherlands,
Talent market	ING is increasingly experiencing a cross-pollination of talent across
	sectors/industries, not limited to traditional banking competitors
Balancing	ING acknowledges the importance of not losing sight of relevant peer companies
	that do not match on the other criteria

Rules and regulations prescribe a mix of comparable relevant Dutch and relevant European financial and non-financial institutions, as such our peer group approach and guiding principles are in line with those regulations. Given the very different pay structures in Switzerland we have excluded those institutions from our benchmark.

The Supervisory Board intends to keep the peer group as stable as possible during the life of the policy. Each year the appropriateness of the selected companies will be assessed against the guiding principles, which will not change during this time. The peer group constituents will be reported in the Integrated Annual Report.

2 Total direct compensation refers to the sum of base salary and variable remuneration and excludes pension arrangements and other benefits such as allowances.

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In light of the principles of the Dutch Banking Code, stipulating that total direct remuneration of the Executive Board is below the median of a relevant peer group, ING will report annually on the relevant pay position against the median remuneration in the peer group for Executive Board members. ING will continue to progress towards positioning the Executive Board total direct remuneration just below the median.

2.3 Remuneration components

Base salary	Details
Purpose	▪ The base salary is set to reflect the individual's role, responsibilities and experience
	and to reward ongoing contribution to the role.
Operation	▪ Base salary is fully paid out in cash.
	▪ Reviewed annually by the Supervisory Board in line with the wider workforce with
	potential increases normally applying from January.
	▪ The Supervisory Board will pro-actively report the base salary development in the
	Annual Report.
Maximum	▪ Increases may be made at the Supervisory Board's discretion. The below factors
opportunity	are given consideration in determining base salaries:
	▪ the individual's level of skill and performance;
	▪ ING's business performance, and market conditions;
	▪ internal pay ratios and salary increases for other employees within ING;
	▪ remuneration level at the external peer group (see section 2.2 Market
	perspective);
	▪ public indexation reference points (e.g. consumer price index); and
	▪ stakeholder views.
	▪ In reviewing base salaries, the Supervisory Board takes into account the wide
	range of factors as mentioned above, with a particular focus on the salary
	increases for other employees within ING.
	▪ The Supervisory Board may determine larger increases in exceptional
	circumstances, such as when these lead to a change in responsibility, where the
	overall total compensation opportunity has been set lower than the market and
	when it is justified based on skills, experience and performance in the role.
	▪ If any significant changes to Executive Board base salaries are to be proposed, a
	stakeholder consultation will be carried out.

Pension	Details
Purpose	▪ To support Executive Board members to build long-term retirement savings.
Operation	▪ Executive Board members participate in ING's general collective defined
	contribution (CDC) pension plan in the same way as all employees working in the
	Netherlands.
	▪ Similar to all participants in the Dutch CDC pension plan who earn a salary above
	the maximum allowed pensionable salary1, the Executive Board members are
	compensated for the lack of pension accrual by means of a monthly individual
	savings allowance. This is determined annually based on the collective labour
	agreement (and not at the discretion of the Supervisory Board).
Maximum	▪ Opportunity in accordance with the arrangements of participation in the Dutch
opportunity	CDC pension plan and savings allowance for the lack of pension accrual above the
	fiscal maximum.

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Benefits	Details
Purpose	▪ To provide a market competitive and appropriate benefits package to support
	executives to carry out their role effectively.
Operation	▪ Benefits are offered if considered appropriate by the Supervisory Board in the
	context of the executive's role, specific individual circumstances and benefits
	offered to the wider workforce and for comparable roles in ING's peer group.
	▪ Executive Board members are eligible for benefits including, but not restricted to
	reimbursement of costs related to travel and accident insurance, expatriate
	allowances (such as reimbursement of costs associated with relocation, housing,
	school/tuition fees and international health insurances, if applicable), banking and
	insurance benefits from ING (on the same terms as for other employees of ING in
	the Netherlands), tax and financial planning services to ensure compliance with
	the relevant legislative requirements, the use of a company car or driver service
	(including any tax liabilities).
	▪ The value of the benefit may fluctuate depending on, among other things,
	personal situation and insurance premiums.
	▪ Applicable benefits, including the associated monetary value (in euros) on an
	individual basis are disclosed in the Annual Report.
Maximum	▪ The maximum opportunity for benefits will vary based on the market, role and
opportunity	individual circumstances.

Variable	Details
remuneration
Purpose	▪ To drive and reward performance against annual financial and non-financial
	targets that are consistent with ING's strategy, aligned to shareholder interests
	and are in accordance with the applicable regulatory requirements.
	▪ To encourage long-term value creation and alignment with shareholder interests,
	delivery of variable remuneration is partly deferred and fully paid in ING Group
	shares.
Operation	▪ The Executive Board members are eligible for annual variable remuneration. The
	amount of variable remuneration is based on performance as measured against
	agreed financial, non-financial and risk objectives. At the beginning of each
	performance year, the Supervisory Board determines the performance measures
	and targets applicable for determining variable remuneration that year, see
	paragraph 2.4 Choice of performance measures and targets.
	▪ The award of any variable remuneration is at the discretion of the Supervisory
	Board. Discretion may also be exercised by the Supervisory Board to ensure that
	the annual variable remuneration outcome is a fair and accurate reflection of
	business and individual performance and any risk-related issues (but it will not
	exceed the maximum opportunity).
	▪ Delivery is fully in ING Group shares.
	▪ Variable remuneration awards are paid 40% upfront3 and 60% is deferred. The
	deferred portion vests in equal annual tranches over five years. In line with
	applicable regulations, Executive Board members must hold all variable
	remuneration paid in shares for at least five years from the award date. This
	means that for shares that have been awarded upfront, a holding period of five
	years applies. After vesting the Executive Board members are not allowed to sell
	their shares for at least another year in line with regulatory requirements.
	▪ During the holding period, the Executive Board members are allowed to sell part of
	their vested shares for tax purposes only ('sell for cover').

3 The term 'upfront' is here used in definition as in the EBA Guidelines on Sound Remuneration Policies, meaning: "payments which are made immediately after the accrual period and which are not deferred."

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	▪ The deferral and vesting schedule is illustrated in paragraph 2.6 Illustrative
	overview of our variable remuneration approach.
	▪ Vesting is also subject to the provisions of the plan rules and award agreements
	including employment and the holdback and clawback provisions.4
Maximum	▪ Variable remuneration awards can be any amount from zero to the maximum. In
opportunity	case of achievement of target performance, variable remuneration of 16% of
	annual base salary will be awarded.
	▪ The maximum annual variable remuneration opportunity is 20% of annual base
	salary (legally allowed maximum variable remuneration at the time of
	implementation of this policy).
Holdback and	▪ All variable remuneration is subject to holdback and/or clawback at the discretion
clawback	of the Supervisory Board and to the extent permitted by law.
	▪ In applying possible holdback and clawback the Supervisory Board receives input
	and support from the relevant Supervisory Board committees, such as the
	Remuneration Committee, the Risk Committee and the Audit Committee.
	▪ The holdback provisions enable the Supervisory Board to reduce the amount of
	unvested variable remuneration (including to nil) prior to vesting in specified
	circumstances.
	▪ The clawback provisions enable the Supervisory Board to recover amounts of
	variable remuneration after they have vested or to recover paid awards.
	▪ The clawback provision applies during the maximum limitation period in
	accordance with legal and regulatory requirements.
	▪ As a general rule, ING will apply holdback/clawback to the entire amount of
	awarded variable remuneration.
	▪ Holdback and/or clawback may be applied in a broad set of circumstances
	including, but not limited to:
	▪ individual misconduct, incompetence or negligence;
	▪ a material failure of risk management or breach of risk management policies;
	▪ the participation in or responsibility for conduct which resulted in significant
	losses to ING Group N.V. or any of the legal entities in its group;
	▪ any regulatory sanctions where the conduct of the Executive Board member
	contributed to the sanction;
	▪ a material restatement of the financial statements of ING Group N.V. or any
	subsidiary, or the Group or any business unit suffering a material downturn in
	its financial performance;
	▪ an accounting restatement due to the material non-compliance of ING with
	any reporting requirement under applicable securities law (under NYSE Listing
	Standards);
	o including any required accounting restatement to correct an error in
	previously issued financial statements that is material to the previously
	issued financial statements,
	o or that would result in a material misstatement if the error was corrected
	in the current period or left uncorrected in the current period.
	▪ any payment of variable remuneration would be unacceptable according to
	the principles of reasonableness and fairness;
	▪ any payment that was made on the basis of incorrect information about the
	achievement of the goals underlying the variable remuneration, or about the
	circumstances on which variable remuneration was dependent.

4 In determining whether to apply holdback and/or clawback, and the extent of such application, the factors to be considered include but are not limited to: the specifics of the event, the magnitude of any loss, economic or reputational damage, the direct or indirect involvement of the individual in the action or transaction, the length of time that has passed since the action or transaction, other factors, such as changes in law or the economy.

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