Danske Bank A/S : Remuneration Report 2022

Remuneration Report 2022

Danske Bank Group

IntroductionI t	Summary of key disclosures

2 DANSKE BANK / REMUNERATION REPORT 2022

Contents

1. Introduction
2. Summary of key disclosures

1. Remuneration Policy and Corporate Governance

1. - Remuneration Policy

1. - Corporate Governance
2. Remuneration of the Board of Directors

1. Remuneration of the Executive Leadership Team

1. - Variable remuneration

1. - Short-term Incentive

1. - Long-term Incentive
2. - Summary of STI and LTI grants for 2022
3. - Share-based remuneration and shareholdings

1. - Backtesting and Claw back

20 Comparative overview

1. Risk and compliance matters

1. - Risk impact of remuneration

1. - Basis of preparation

1. - Advisory vote on Remuneration Report 2021
2. Statement by the Board of Directors
3. Independent auditor's report

Remuneration Policy and Corporate Governance

Remuneration of the

Board of Directors

Remunera Executive Lea

ation of the adership Team

Comparative overview

Risk and compliance matters

Statement by the	Independent
Board of Directors	auditor's report

DANSKE BANK / REMUNERATION REPORT 2022

3

Introduction

from the Chairman of the Board of Directors and the Remuneration Committee

The beginning of 2022 was characterised by the strong post COVID-19 recoveries in the Nordic economies with strong labour markets and consumer spending. However, the Russian invasion of Ukraine and the swift and determined sanctions imposed on Russia as a respond by the West triggered the biggest geopolitical crisis in Europe since the Second World War with soaring commodity prices reawakening fears of stagflation or even global recession. The European consumers experienced the biggest erosion of disposable income in decades due to increased inflation.

2022 also marked the end of the investigation into Danske Bank by US and Danish authorities regarding the Estonia matter. Danske Bank reached coordinated resolutions with the authorities resulting in a settlement of DKK 15.3 billion. The Danske Bank Group posted a net loss of DKK 5.1 billion. The outlook for 2023 is net profit in a range of DKK 15-17 billion.

For Danske Bank, 2022 was a year in which we continued to make progress with the transformation to become a better bank and delivered progress towards our 2023 ambitions. Among other things, we continued to strengthen our value propositions for our customers through digitalisation and sustainable solutions. Danske Bank was the first Nordic bank to set concrete CO2 reduction targets for selected sectors towards 2030 in relation to lending with the aim of achieving a net-zero loan portfolio by 2050 or sooner. Management confirmed that Danske Bank is fully committed to take leadership in the green transition and as the next step in our ongoing transformation, we will announce new strategic ambitions within the first half of 2023.

In 2022 the simplification of the bonus programmes and review of the KPIs progressed. In line with the Remuneration policy, the short-term incentives for the CEO and the rest of the Executive Leadership Team have been set with reference to a balanced scorecard of financial and non-financial KPIs including a further developed sustainability KPI supporting the Danske Bank Group strategy.

In 2022, the composition of the Board of Directors changed. Karsten Dybvad did not seek re-election and Jacob Dahl, Allan Polack and Helle Valentin were all elected at the annual general meeting in 2022. Bente Bang and Kirsten Ebbe Brich were re-elected and Aleksandras Cicasovas and Louise Aggerstrøm Hansen newly elected by the employees in 2022.

The composition of the Executive Leadership Team also changed during 2022. As announced last year, the Executive Leadership Team welcomed Johanna Norberg and Christian Bornfeld in May. In June 2022 it was announced that Christian Bornfeld would assume the responsibility for Danske Bank's units Financial Crime Prevention and Financial Crime Risk working within the financial crime prevention across the organisation following Philippe Vollot's resignation. At the same time the Chief Compliance Officer Satnam Lehal's organisation was moved interim - and later permanently - under the Chief Risk Officer, Magnus Thor Agustsson. The Chief Compliance Officer continued to have an independent reporting line to the Board of Directors.

Copenhagen, 2 February 2023

Martin Blessing,

Chairman of the Board

of Directors

Introduction	SummerySu ary of key disclosuresr s	Remuneration Policy and
Corporate Governance

4 DANSKE BANK / REMUNERATION REPORT 2022

Summary of key disclosures

Remuneration of the

Board of Directors

Remunera Executive Lea

Danske Bank's Remuneration Report provides a full disclosure of the bank's remuneration decisions relating to the Board of Directors and the Executive Leadership Team, as well as the related business context and governance process.

A summary of these disclosures as they relate to the Chairman of the Board of Directors, the members of the Board of Direc- tors, the CEO and the Executive Leadership Team as a whole is provided below.

Remuneration of the Chairman and the members of the Board of Directors

At the Annual General Meeting in March 2022, Martin Blessing was elected Chairman of the Board of Directors replacing Karsten Dybvad who left the Board of Directors. The Chairman and the members of the Board of Directors receive a fixed annual base fee and are not eligible for any form of variable remuneration or pension unless required in accordance with local regulations.

(DKK thousands)		2022 Remuneration		2021 Remuneration
Martin Blessing	2,873		1,054
Chairman (from 17 March 2022, former Board member)
Karsten Dybvad	840		3,803
Chairman (until 17 March 2022)

(DKK thousands)		2022 Remuneration		2021 Remuneration
Board of Directors	15,506	15,536

Remuneration of the CEO

The CEO's salary was considered and agreed by the Remuneration Committee based on the scope and nature of the position, the CEO's qualifications, his performance and external benchmarking analysis.

The remuneration of the CEO consists of fixed remuneration (base salary and benefits) and variable remuneration (Short- term Incentive Programme (STI) and Long-term Incentive Programme (LTI)).

(DKK thousands)		2022 Total Fixed 1	Short-term incentive	Long-term incentive	2022 Total
				programme	programme
Carsten Rasch Egeriis	14,827		1,797		1,095	17,719
Chief Executive Officer

1 Including salary and benefits.

Remuneration of the Executive Leadership Team (including the CEO)

The remuneration of members of the Executive Leadership Team (ELT) consists of fixed remuneration (base salary, pension and benefits) and variable remuneration (STI and LTI).

(DKK thousands)		2022 Total Fixed1	Short-term incentive	Long-term incentive	Extraordinary	2022 Total
				programme	programme	payments
Current ELT	75,867		7,131		4,953		-	87,951

1 Including salary, pension and benefits.

ation of the adership Team

Comparative overview

Risk and compliance matters

Statement by the	Independent
Board of Directors	auditor's report

DANSKE BANK / REMUNERATION REPORT 2022

5

Summary of performance assessment

ELT members		KPI categories	Aggregated weight	Total performance assessment
Carsten Rasch Egeriis, CEO		Financial	25%		Below target
		Non-financial	55%
		Risk & Compliance metric	20%
Other ELT		Financial	35%		Below target
		Non-financial	45%
		Risk & Compliance metric	20%

The table below shows the composition of the remuneration of members of the Executive Leadership Team by category. The fixed remuneration includes base salary, pension and benefits. For the purposes of easy comparison of remuneration, all figures have been annualised.

ELT total remuneration breakdown - annualised (DKK millions)

Fixed 2022		Variable cash 2022		Variable shares 2022

2.98

2.17

1.15

0.72

14.83 14.81

Fixed 2021		Variable cash 2021		Variable shares 2021

						1.39	1.57
		1.14						1.11
		0.32	1.38			0.49	0.54	0.30	1.46	1.16	1.31
				0.99
		10.39			10.46	10.46	10.46
		0.48		0.27				0.52	0.39	0.43	0.96	1.21
			9.42	0.95
			9.38				9.27	9.32
						9.19	0.27
				0.30
-EgeriisRaschCarstenCEO	-EgeriisRaschCarstenCEO	BehringBerit CorporatesLargeofHead- & Institutions	BehringBerit CorporatesLargeofHead- & Institutions	Head-BomfeldChristianofPersonal FinancialandCustomersCrime Risk & Prevention	CFO-EngelsStephan	CFO-EngelsStephan	COO-WoeldersFrans	COO-WoeldersFrans	CRO-AgustssonMagnus	CRO-AgustssonMagnus	8.63	0.41
NorbergJohanna CustomersBusinessofHead-	CPO-BreumKarsten	CPO-BreumKarsten
				8.20									8.01
2022	2021	2022	2021	2022	2022	2022	2021	2022	2021	2022	2021	2022	2021