Transparency
and Disclosure
Report 2019
Pillar III

Adyen Transparency and Disclosure Report 2019|Page 1

Contents
Concise risk statement ................................................................................................................... 3
Introduction....................................................................................................................................... 4
Scope of consolidation.................................................................................................................................................................... 4
Risk management framework and strategy ............................................................................................................................... 8Three lines of defence ................................................................................................................................................................ 8
Strategy and objective setting .................................................................................................................................................. 8
Risk appetite................................................................................................................................................................................. 8
Risk assessment and control activities.................................................................................................................................... 8
Review and revision..................................................................................................................................................................... 9
Governance arrangements ............................................................................................................................................................ 9
Board composition and directorships ..................................................................................................................................... 9
Supervisory Board..................................................................................................................................................................... 10
Board recruitment and diversity policy.................................................................................................................................. 11
Risk management committees ............................................................................................................................................... 11

Disclosures on Pillar I ................................................................................................................... 12
Capital .............................................................................................................................................................................................. 12
Own funds................................................................................................................................................................................... 12
Capital requirements..................................................................................................................................................................... 13
Credit risk ................................................................................................................................................................................... 13
Market risk .................................................................................................................................................................................. 16
Operational risk ......................................................................................................................................................................... 16
Capital buffers ................................................................................................................................................................................ 18
Geographical distribution of credit risk ................................................................................................................................. 18
Leverage .......................................................................................................................................................................................... 18
Leverage ratio ............................................................................................................................................................................ 18

Disclosures on Pillar II .................................................................................................................. 20
Internal capital adequacy assessment process........................................................................................................................ 20
Interest rate risk in the banking book ......................................................................................................................................... 20

Remuneration policy .................................................................................................................... 21
Adyen remuneration policy........................................................................................................................................................... 21
Remuneration principles............................................................................................................................................................... 21
Remuneration package ............................................................................................................................................................ 21
Variable remuneration................................................................................................................................................................... 21
Identified staff ................................................................................................................................................................................. 22
Total annual remuneration ...................................................................................................................................................... 22
Nomination and Remuneration Committee ......................................................................................................................... 22
Remuneration for the Management Board........................................................................................................................... 22

Annexes .......................................................................................................................................... 24
Annex I Own funds ......................................................................................................................................................................... 24
Annex II Countercyclical capital buffer ....................................................................................................................................... 24
Annex III Leverage .......................................................................................................................................................................... 24
Annex I Own funds ......................................................................................................................................................................... 25
Annex II Countercyclical capital buffer ....................................................................................................................................... 27
Annex III Leverage .......................................................................................................................................................................... 28
2

Concise risk statement
The Adyen DNA
We are a technology company redefining payments. We work together with over 1,182 people spread across 22 offices
around the world. To us, “winning is more important than ego” – we value people for their skills and what they bring to
the company, not for their titles. We work with cross-functional teams and empower them to make their own decisions.
We call these workstreams. We think function beats form, and our effort toward our goal of helping our merchants growis singular.
Description of Business Activities
The Adyen platform integrates the full payments stack (gateway, risk management, processing and acquiring) with acommon back-end infrastructure for authorizing payments across its merchants' sales channels as well as offeringfeature-rich APIs. This integrated platform allows for the delivery of products and services on a global scale with local
capabilities, directly connecting merchants to Visa, Mastercard and many other payment methods, and across sales
channels, including its merchants' online, mobile and POS channels, while providing a high level of reliability, security,
performance and data insights. During 2019 Adyen maintained consolidation in the many payment processing
options, and with the roll out of Sales Day Payout and introduction of new products such as Adyen Issuing, it keeps
searching for ways to improve services provided to its merchants.
Risk management
Adyen recognizes that risks are associated with achieving its strategy and business objectives. Managing these risks1 isan essential part of doing business. Adyen has adopted a uniform and systematic company-wide approach for managing
risks. Adyen's integral risk management framework is based on the Enterprise Risk Management (ERM) model as issued
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2017.
CapitalThe capital requirements comprise credit risk, operational risk and market risk. Adyen uses the Standardized Approachfor each category of risk to determine its capital requirements. Resulting from Adyen’s business model, operational risk
is the largest risk category. Because of the day of settlement, cash on the balance sheet was higher than average,
resulting in higher risk weighted assets. The total risk exposure amount at 31 December 2019 was EUR 1.57 billion.

The capital requirements need to be covered by sufficient own funds. Adyen’s own funds consist fully of CET1 capital,
which was EUR 745 million at 31 December 2019. This resulted in a CET1 capital ratio of 47.6%.
Leverage
Adyen’s leverage ratio is 29%, which is above the non-binding requirement of 3%.
Liquidity coverage ratio
The liquidity coverage ratio of Adyen was 5,459% at the end of 2019, well above the regulated threshold of 100%.
Declaration Management Board
The Management Board of Adyen declares that the risk management arrangements of Adyen are adequate with regards
to Adyen’s risk profile and strategy.

1 Art. 435(1)(e)(f) CRR.
Adyen Transparency and Disclosure Report 2019|Page 3

Introduction
This document presents the consolidated Transparency and Disclosure Report 2019 (Pillar III report) of Adyen N.V.
(Adyen) as per 31 December 2019.2
As a less significant institution3 based in the European Union, Adyen operates under the Capital Requirements Directive
IV (CRD IV) and Capital Requirements Regulation (CRR). This framework is based on a three-pillars concept:•
Pillar I – Minimum capital requirements•
Pillar II – Supervisory review•
Pillar III – Market disclosures
In Pillar I, the capital requirements are calculated on the basis of three categories of risk that an institution faces: credit
risk, market risk and operational risk. These capital requirements need to be covered by sufficient own funds. Adyen
uses the standardized approach for each category of risk to determine its capital requirements.
In Pillar II, the supervisor reviews the viability of Adyen and its ability to meet the reporting requirements. This Supervisory
Review and Evaluation Process (SREP) comprises four components:•
Business Model Assessment (BMA)•
Internal Capital Adequacy Assessment Process (ICAAP)•
Internal Liquidity Adequacy Assessment Process (ILAAP)•
Internal governance and institution-wide control assessment
The Pillar III disclosure framework seeks to promote market discipline through regulatory disclosure requirements.
Pursuant to Part Eight of the CRR, Adyen is required to publicly disclose information regarding, amongst others, its risk
profile, risk management and capital adequacy. Adyen discloses this information by means of this Pillar III report. The
Pillar III disclosures are based on capital requirements in Pillar I with reference date 31 December 2019.
The content of this pillar III report meets all the requirements laid down in CRR and corresponding delegated regulations
and guidelines.
Unless stated otherwise, all amounts in the report are in thousands of euros.

Scope of consolidation
As an EU parent institution, Adyen N.V. is required to publish a consolidated Pillar III report. Adyen reports its prudential
requirements both on a consolidated as well as on a stand-alone basis. Its subsidiaries are only included in its
consolidated reporting. Adyen’s prudential scope of consolidation does not deviate from its IFRS scope of consolidation.
Adyen N.V. is a licensed Credit Institution by De Nederlandsche Bank (the Dutch Central Bank) and registered in the
Netherlands under the company number 34259528. The Credit Institution license includes the ability to provide crossborder services in the EEA. Adyen N.V. directly or indirectly owns 100% of the shares of, and therefore controls all entities
included in the consolidated financial statements.
Adyen has operations in the Netherlands, Brazil, Singapore, UK, Canada, Australia, South Korea, Hong Kong, Mexico,
China, New Zealand, Malaysia, India, Japan and the United States, with branches in Germany, France and Sweden andrepresentative offices in Belgium, Italy and Spain. The address of the Adyen N.V. registered office is Simon
Carmiggeltstraat 6 -50, 5th floor, 1011DJ Amsterdam, the Netherlands. Table 1 provides an overview of all branches ofAdyen N.V. and subsidiaries of Adyen International B.V.4

2 Art. 436(a) CRR.
3 Art. 441 CRR.
4 Art. 436(b) CRR.
Adyen Transparency and Disclosure Report 2019|Page 4

Table 1: Overview of Adyen’s branches and subsidiaries
Adyen N.V. - Branches
NameAdyen N.V., German branch
Adyen France
Adyen Nordic Bank Fillial

Branch location
Berlin, Germany
Paris, France
Stockholm, Sweden

Adyen N.V. – Representative offices
NameAdyen N.V., Belgian Representative Office

Branch location
Brussels, Belgium

Adyen N.V., Italian Representative Office

Rome, Italy

Adyen N.V., Spain Representative Office

Madrid, Spain

Adyen International B.V. - Subsidiaries
Direct and indirectownership
percentage

Name

Legal Seat

Adyen Inc.

San Francisco, CA, USA

Adyen Services Inc.

Dover, DE, USA

100%
100%

Adyen Nevada Inc.

Las Vegas, NV, USA

100%

Adyen do Brasil Ltda

São Paulo, Brazil

100%

Adyen Singapore PTE. LTD.

Singapore, Singapore

Adyen UK Limited

London, United Kingdom

Adyen Hong Kong Limited

Hong Kong, Hong Kong SAR

Adyen Australia PTY Limited

Sydney, Australia

Adyen Canada Ltd.

Saint John, Canada

Adyen Korea Chusik Hoesa

Seoul, Republic of Korea

Adyen Mexico, S.A. de C.V.

Mexico City, Mexico

100%
100%
100%
100%
100%
100%
100%

Adyen (China) Software Technology Co. Ltd.

Shanghai, China

Adyen New Zealand Ltd.

Auckland, New ZealandAdyen Malaysia Sdn. Bhd

Kuala Lumpur, Malaysia

Adyen GmbH

Berlin, Germany

Adyen India Technology Services Private Limited

New Delhi, India

Adyen Japan K.K.

Tokyo, Japan

100%
100%
100%
100%
100%
100%

Adyen Transparency and Disclosure Report 2019|Page 5

In table 2, the disclosures within this Pillar III report are linked to the respective provisions of Part Eight CRR.
Table 2: Mapping table Articles to document

Article Subject

Reference

Page

Article 435

Risk
management
objectives andpolicies

Concise risk statement
Risk management framework and strategy

p. 3
p. 8

Article 436

Scope ofapplication

Scope of consolidation

p. 4

Article 437

Own funds

Capitalp. 22

Article 438

Capitalrequirements

Capital requirements
Internal capital adequacy assessment
process

p. 13
p. 19

Article 439

Exposure tocounterparty
credit risk

Not applicable

Article 440

Capital buffers

Capital buffers

Article 441

Indicators ofglobal systemic
importanceNot applicable

Article 442

Credit risk
adjustments

Credit risk adjustment

Article 443

UnencumberedassetsNot applicable

Article 444

Use of ECAI’s

Use of External Credit Assessment
Institutions

p. 13

Article 445

Exposure tomarket risk

Market risk

p. 16

Article 446

Operational risk

Operational risk

p. 16

Article 447

Exposures inequities notincluded in the
trading book

Equities in the banking bookp. 14

Article 448

Exposure tointerest rate risk
on positions not

Interest rate risk in the banking book

p. 19

p. 18

Annexes

Capital instruments
main features
template

Geographicaldistribution of credit
exposures relevant forthe calculation of thecountercyclical capital
bufferp. 13

Adyen Transparency and Disclosure Report 2019|Page 6

included in the
trading book
Article 449

Exposure tosecuritization
positionsNot applicable

Article 450

Remuneration
policyRemuneration policyp. 20

Article 451

Leverage

Leverage

p. 18

Article 452

Use of the IRB
approach tocredit risk

Not applicable

Article 453

Use of credit risk
mitigation
techniques

Not applicable

Article 454

Use of theadvancedmeasurement
approaches tooperational risk

Not applicable

Article 455

Use of internalmarket risk
modelsNot applicable

CRR Leverage ratio Disclosure Template(Quantitative)
CRR Leverage ratio –Disclosure Template(Qualitative)

Adyen Transparency and Disclosure Report 2019|Page 7

Risk management
framework and strategy
Adyen recognizes that risks are associated with achieving its strategy and business objectives. Managing these risks isan essential part of doing business. This chapter describes Adyen’s uniform and systematic company-wide approachfor managing risks. In addition, it lays down Adyen’s risk governance, which sets the tone for, reinforces the importanceof, and establishes oversight responsibilities for risk management.

Risk management objectives and policies
Adyen's integral risk management framework5 is based on the Enterprise Risk Management (ERM) model as issued by
the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2017. The integral risk
management framework structures the risk management activities within Adyen with a view of identifying, assessing,managing, monitoring and reporting risks in a uniform manner.

Three lines of defence
In line with the European Banking Authority (EBA) Guidelines on Internal Governance, Adyen has adopted the threelines-of-defence model, which reflects the segregation between operations (first line management), the risk
management and compliance functions (second line), and the independent internal audit function (third line). The firstline management designs, implements, executes and monitors the control activities to manage performance and therisks taken to achieve Adyen's objectives. The second line risk and compliance functions provide guidance on risk
management requirements, and independently evaluate adherence to defined standards. The third line internal audit
function provides independent assurance on the effectiveness of risk management, including control activities, byperforming audits. The head of internal audit reports directly to the chairman of the Audit Committee and has a dottedline (for day-to-day operations) to the CEO.
During 2019, the second and third-line functions have continued to add resources in line with the overall growth of theorganization. Adyen has strengthened the second line by appointing a Chief Legal and Compliance Officer to theManagement Board per January 1, 2020.

Strategy and objective setting
Risk management, strategy and objective-setting work together in the strategic-planning process. Operational
objectives put strategy into practice while serving as a basis for identifying, assessing, and responding to risk. Adyen's
risk appetite is established and aligned with its strategy.

Risk appetite
Adyen has translated its view on risk appetite into risk appetite statements, which set the overall tone for Adyen's
approach to risk taking. The risk appetite statements for 2019 were approved by the Management Board andSupervisory Board. Adyen’s overall risk appetite is best reflected in the fact that it wants to build an ethical andsustainable business, accepts that its growth strategy may consume some amounts of capital investing in assets, people
and processes, and that it accepts that competition could increase as it seeks to increase market share, thereby
potentially reducing growth opportunities.

Risk assessment and control activities
Adyen performs a top-down company-wide risk assessment on an annual basis or in more frequent intervals, which
includes the identification of key risks that could potentially affect its strategy and business objectives. The purpose
hereof is to assess how big the risks are, both individually and collectively, in order to focus attention on the mostimportant threats and opportunities. Based on EBA guidelines, the key risks are categorized as follows:• Strategic and business risk
• Operational risk
• Financial risk (including credit risk, market risk, liquidity and funding risk)

5 Art. 435(1) CRR.
Adyen Transparency and Disclosure Report 2019|Page 8

Reputational risk is not categorized separately as Adyen considers it a risk that can arise from all other risk categories.
For a more detailed description of the company-wide risks as identified and assessed by Adyen, refer to the Section"Risk Factors" within the Annual Report 2019. To ensure Adyen pro-actively considers integrity risks that may affect its
business, especially as Adyen’s business continues to evolve, it annually performs a systematic integrity risk analysis(SIRA).
Adyen continues to strive towards a strong commitment to risk management. Therefore, it has established a control
environment that provides an appropriate foundation for achieving the company’s objectives and effectively mitigating
risks. Control activities are the policies and procedures that help ensure risks are mitigated and Adyen's objectives areachieved. Adyen uses COSO’s internal control model as a reference for its design, implementation and evaluation ofcontrol activities as part of a system of internal control.

Review and revision
By reviewing its performance, Adyen evaluates how well the risk management components are functioning over time.
The Risk Committee plays a key role in supporting the Management Board with overseeing the effectiveness of Adyen’s
risk management. It carries out this role by monitoring Adyen's risk profile against the risk appetite, which is an ongoingand iterative process. Any material risk limit breach that places Adyen at risk of exceeding its risk appetite and, inparticular, of putting at risk Adyen's financial health, is escalated promptly to the Management Board. Combinations ofongoing and separate evaluations are used to determine if the components of internal control are present andfunctioning effectively. The ongoing evaluations are built into Adyen's business processes and provide timely
information. The separate evaluations, including independent management testing, are conducted periodically and mayvary in scope and frequency depending on the risks and effectiveness of the ongoing evaluations. Any identified
deficiencies are discussed within the Risk Committee and reported to the Management Board along with relevant
findings, recommendations and remediation plans.6

Governance arrangements
Adyen's governance sets the tone, reinforces the importance of, and establishes oversight responsibilities for risk
management. Adyen has established a governance which is consistent with the size, complexity and risk profile of thecompany. Adyen’s governance7 is reflected in certain internal rules and regulations, including the Articles of Association(statuten), the Management Board By-Laws, the Supervisory Board By-Laws and the Terms of reference of our
Supervisory Board committees.

Board composition and directorships
Adyen maintains a two-tier board structure consisting of a Management Board and a Supervisory Board. The
Management Board is responsible for the day-to-day management, which includes, among other things, formulating
Adyen’s strategy and policies and setting and achieving Adyen’s objectives. The Supervisory Board supervises andadvises the Management Board. Each board is accountable to the General Meeting for the performance of its duties.

Management Board
Adyen’s Management Board is composed of the following six members.
Pieter Willem van der Does is the CEO of Adyen and has been a member of the Management Board since 2007. Hespent over 15 years working in the payments industry. Before co-founding Adyen in 2006, Mr. van der Does was CCO
at Bibit (a pioneering international payment service provider, acquired by the Royal Bank of Scotland in 2004). Mr. Van
der Does also serves as a Supervisory Board member of Écart Invest B.V.
Arnout Diederik Schuijff is the CTO of Adyen and has been a member of the Management Board since 2007. He is
considered a leading expert in the architecture of advanced payment technology solutions. After co-founding and being
responsible for creating the technology behind Bibit, Mr. Schuijff co-founded Adyen together with Mr. van der Does.
Roelant Prins is the CCO of Adyen and has been a member of the Management Board since 2009. Mr. Prins is
responsible for the commercial activities of Adyen. After starting his career as a consultant, he moved to the online
payments industry early 2000. Throughout the years, Mr. Prins has held various international management roles in sales
and business development for companies providing payment solutions to international e-commerce businesses.
Ingo Jeroen Uytdehaage is the CFO of Adyen and has been a member of the Management Board since 2011. He has
earned his MBA in accounting and finance from Maastricht University and studied supply chain management andorganizational behavior at the Aarhus Business School in Denmark. Additionally, Mr. Uytdehaage obtained his CPA at

6 Art. 435(2)(e) CRR.
7 Art. 435(2) CRR.
Adyen Transparency and Disclosure Report 2019|Page 9the Vrije Universiteit in Amsterdam. Prior to joining Adyen, Mr. Uytdehaage was a Finance Director at KPN. Currently, healso serves as non-executive director on the board of TransferWise Ltd. and as chairman on the board of photography
museum Foam in Amsterdam.
Samuel Graeme Halse is the General Manager of Adyen and has been a member of the Management Board since 2015.
After starting his career as a commercial lawyer in New Zealand, he moved to the online payment industry in 2010. Mr.
Halse has built substantial experience in payments and has worked with many leading global e-commerce companies,
assisting them with their international payments rollout and optimization of payment processes. In the course of 2020,
Mr. Halse will be moving back to New Zealand. This gives sufficient time for Mr. Halse to assist with Mr. Zaki’s transition
into the COO role.
Kamran Zaki has been appointed as the COO of Adyen and a member of the Management Board per January 1, 2020.
Mr. Zaki will be responsible for the operations to customers that make use of Adyen’s platform. Previously, Mr. Zaki
was the President of Adyen North America since 2014, and in this capacity, Kamran oversaw all North American
operations, including sales, marketing, product development and customer support. Prior to Adyen, Kamran was the
Head of Global Payments at Netflix where he helped expanding the Netflix streaming service. Previously, Kamranspent seven years at PayPal. During his tenure there, he headed up payments teams across Europe, North America
and Emerging Markets (i.e. LatAm, Middle East and Africa).
Mariëtte Swart has been appointed as the CLCO of Adyen and a member of the Management Board per January 1,
2020. Before joining the board, Mrs. Swart served as Adyen’s General Counsel and Company Secretary since 2015. She
has built the legal team from the ground up, ensuring that the legal function effectively supports the business at a
strategic and operational level. Prior to Adyen, Mariëtte worked at an international law firm where she gained a vast
experience in global financial services, helping companies with products in payments, debt and equity solutions, M&A
and financial markets.
Joannes Gerardus Wijn is the CSRO of Adyen and has been member of the Management Board since 2017. Mr. Wijn
has vast experience in global financial services, supporting companies with their payment products, debt and equity
products, M&A activities and access to financial markets. Before joining Adyen, Mr. Wijn served as a member of theManagement Board of ABN AMRO. In addition, Mr. Wijn was State Secretary for Finance and Minister for Economic
Affairs within the Dutch government. Mr. Wijn also serves as a Supervisory Board member of Royal Schiphol Group.
After three successful years at Adyen, Joop Wijn will leave the company and the board, as of May 31, 2020.

Supervisory Board
The Supervisory Board supervises the conduct and policies of the Management Board and the general course of affairsof Adyen and its business. The Supervisory Board also provides advice to the Management Board. In performing theirduties, the members of the Supervisory Board are required to be guided by the interests of Adyen which includes theinterests of the business connected with it. These interests are driven by Adyen’s focus on long-term value creation andthe way in which this is implemented in Adyen’s strategy and culture.
Adyen’s Supervisory Board is composed of the following four members.
Piero Overmars serves as a member of the Management Board of Randstad Beheer B.V., and as a member of theSupervisory Boards of AMC Academic Medical Center and Dura Vermeer Groep N.V. Previously, he served as Chairmanof the Supervisory Boards of Nutreco and SNS Reaal and as President of the Nyenrode Foundation, following an
extensive career at ABN Amro that culminated in a Board Member position. Mr. Overmars holds an MBA from Nyenrode
Business University.
Delfin Rueda Arroyo serves as CFO and member of the Executive Board and Management Board of NN Group.
Previously, he was CFO and member of the Management Board of ING Insurance, following an extensive career atAndersen Consulting, UBS, JP Morgan and Atradius. Mr. Rueda holds a degree in Economic Analysis and Quantitative
Economics from the Complutense University of Madrid (Spain). He also holds an MBA from the Wharton School,
University of Pennsylvania (USA).
Joep. van Beurden is CEO and member of the Executive Board of Kendrion. Previously, he served as CEO of CSR Plc.
(UK) and NexWave Inc. (France), following a career at Royal Dutch Shell, McKinsey, Philips and Canesta Inc. Mr. van
Beurden holds a degree in Applied Physics from Twente University of Technology (Netherlands).
Pamela Ann Joseph was appointed as a member of the Supervisory Board for a four-year term at the Annual General
Meeting of 21 May 2019. Pamela Joseph is CEO and member of the Management Board of Clearent, and holds a nonexecutive position in the Boards of Paychex, Transunion and Spelman College. Previously, she served U.S. Bank corp.
Payment Services as a Vice-Chairman, and prior to that Elavon as President and COO. She started her career at Wells
Fargo Bank and VISA International. She holds a degree in Business Administration from the University of Illinois (USA).

Adyen Transparency and Disclosure Report 2019|Page 10

Board recruitment and diversity policy
The Articles of Association provide that the Management Board shall consist of two or more members and that theSupervisory Board determines the exact number (more than two) of Managing Directors after consultation with theManagement Board.
The General Meeting appoints Managing Directors upon a nomination by the Supervisory Board in accordance with the
Articles of Association. The Supervisory Board shall make one or more nominations to the General Meeting in case aManaging Director is to be appointed.
In the event that the Supervisory Board has made a nomination, the resolution of the General Meeting to appoint suchnominee shall be adopted by an absolute majority of the votes cast. A resolution of the General Meeting to appoint aManaging Director other than in accordance with a nomination of the Supervisory Board, but in accordance with theagenda for such General Meeting, shall require a majority of two thirds of the votes cast representing more than half of
the Company's issued share capital. However, the General Meeting may at its discretion appoint a Managing Director
other than upon the nomination of the Supervisory Board, provided that a proposal to appoint such other person has
been put on the agenda of the relevant General Meeting.
Adyen is a licensed credit institution, which means that any appointment of a Managing Director must be approved by
DNB. In connection with its approval procedure, DNB will test the proposed new Managing Director on integrity(betrouwbaarheid) and suitability (geschiktheid).
Best practice provision 2.1.5 of the Dutch Corporate Governance Code, provides that the Supervisory Board shoulddraw up a diversity policy for the composition of the Management Board and Supervisory Board. The policy should
address the concrete targets relating to diversity. Adyen deviates from best practice provision 2.1.5 as no concretetargets were set on diversity. The Supervisory Board has, with taking the Parliament’s adoption of the SER’s guideline
on Supervisory Board composition into account, started the search for a fifth female Supervisory Director and is looking
forward to enhance diversity even more within Adyen

Risk management committees
The Management Board has instituted three committees to support with its risk management oversight: the Compliance
Committee, the Merchant Risk Committee, and the Risk Committee. The Compliance Committee monitors Adyen’s
integrity and compliance risks, the Merchant Risk Committee monitors the merchants’ potential liability (MPL) risk andthe Risk Committee monitors the overall risk profile.
The Risk Committee and the Compliance Committee report to the Management Board at least quarterly theirobservations, recommendations and deliberations on findings regarding compliance, risk management and internal
control. The Risk Committee held six meetings during 2019. The Management Board reviews reports from control
assessments made on the operating effectiveness of systems and controls, acts on recommendations from the Risk andCompliance Committees and decides on corrective actions. The Management Board reports to the Audit Committee on
the effectiveness of Adyen's risk management and internal control systems during the quarterly Audit Committee
meetings.

Adyen Transparency and Disclosure Report 2019|Page 11

Disclosures on Pillar I
Within the CRR and CRD IV framework, Pillar I lays down the absolute minimum capital requirements in order to cover
the financial risks institutions face. These risks are credit, market and operational risk. This chapter describes the capitalrequirements of Adyen, based on these three major risk categories.

CapitalFor regulatory purposes, capital8 is defined as own funds, which can be subdivided in Common Equity Tier 1, Additional
Tier 1 and Tier 2. Adyen solely has Common Equity Tier 1 capital.

Own funds
Common Equity Tier 1 capital comprises IFRS equity after taking into account prudential filters and deductions. Table 3
provides a reconciliation of own funds with IFRS capital.9 Annex I, describes the main features of this Common Equity
Tier 1 capital.
Table 3 Reconciliation between IFRS equity and own funds (in EUR ‘000)

31-Dec-19
IFRS equity

868,321

Of which: common shares

179,296

Of which: paid up capital301

Of which: retained earnings

559.494

Of which: other reserves

129,230

Adjustments due to prudential filters and deductions(122,846)

Intangible assets
DTA that rely on future profitability and do not arise from temporary
differences(7,640)Warrant reserve(53,401)

Prudent valuation(80)

Total Common Equity Tier 1 Capital10(61,725)

745,475

Prudential filters and deductions
Prudential filters and deductions remove or reduce certain elements from Adyen’s own funds that are considered not tobe eligible to absorb losses. The amounts related to these prudential filters and deductions are shown in Table 3.

Adyen applies the following prudential filter to its Common Equity Tier 1 capital:
Additional value adjustments due to the requirements for prudent valuation
Institutions are required to calculate an additional value adjustment in order to adjust the fair value to a prudent value for
all assets measured at fair value.11 The additional value adjustment must be deducted from Common Equity Tier 1
capital. Adyen has two financial instruments on the balance sheet that are measured at fair value, and subject to an
additional value adjustment, which are VISA shares and a derivative financial liability. As previously disclosed in the 2018
report, part of the derivative financial liability was prospectively de-recognized and the new equity instruments
recognized at fair value in equity as warrant reserve. The first two tranches of the derivative liability resulting from amerchant contract are reclassified from derivative liability to warrant reserve in equity for the amount of EUR 53,401.
In addition, Adyen applies the following deductions to its Common Equity Tier 1 capital:
Intangible assets other than goodwill
Deferred tax assets that rely on future profitability and do not are from temporary differences
Warrant reserve

8 Art. 437(1) CRR.
9 Annex I comprises the relevant rows of the ‘Own funds disclosure template’ as laid down in ITS (EU) 1423/2013.
10 No restrictions ex. art. 437(e) CRR were applied to the calculation of own funds.
11 Art. 34 and 105 CRR.
Adyen Transparency and Disclosure Report 2019|Page 12

Capital requirements
Adyen uses standardized approaches to determine how much capital it is required to have for credit, market andoperational risk. Resulting from Adyen’s business model, capital requirements for operational risk are the highest.

Credit risk
Credit risk can origin from the risk that a counterparty will not settle the full value of an obligation — neither when it
becomes due, nor thereafter. Adyen is and will continue to be subject to the risk of actual or perceived deterioration of
the commercial and financial soundness, or perceived soundness, of merchants and other financial institutions, inparticular in relation to receivables from financial institutions regarding settled payment transactions, and cash andcash- equivalents held at financial institutions. In addition, Adyen has credit risk on certain contract assets and fromoffering merchants a pre-financing service, which it refers to as Sales Day Payout.
Adyen has no derivatives or securities financing transactions, nor positions in securitizations. Adyen does not apply
credit risk mitigation techniques.
In order to calculate its own funds requirement for credit risk, Adyen applies the standardized approach. Adyen’s total
risk-weighted exposure for credit risk is EUR 610,691 resulting in an own funds requirement for credit risk of EUR
48,855.12
Credit risk adjustments
Adyen considers an exposure to be past due if it has been due for more than one day and considers an exposure indefault and impaired when either or both of the following have taken place:13
The counterparty is past due more than 90 days
The counterparty is considered unlikely to pay, for example due to bankruptcy or other factors

Adyen assesses on a forward-looking basis the expected credit loss associated with its debt instruments carried atamortized cost. The impairment methodology applied depends on whether there has been a significant increase in credit
risk. For trade receivables and contract assets, Adyen applies the simplified approach, which requires expected lifetime
losses to be recognized from initial recognition of the assets.14
At reference date, Adyen has no exposures in default. This is for the majority driven by a combination of low credit risk,
resulting from high credit quality ratings, and the short-term nature of financial instruments in scope. Therefore, Adyen
does not make use of specific credit risk adjustments.
Use of External Credit Assessment Institutions
Adyen applies ratings from External Credit Assessment Institutions 15 (ECAIs) to determine the risk weight of an
exposure. With respect to its rated exposures, Adyen by default uses Moody’s whenever it has a rating available. Only inthe case that no rating of Moody’s is available, Adyen uses a rating provided by Fitch. Adyen therefore does not cherrypick its ratings. In order to determine the risk weight of an exposure, a rating is converted into the corresponding credit
quality step based on the standard association as published by the EBA.16 Exposures to unrated exposures are by default
100% risk weighted, in line with CRR Art. 122(2). Unrated institutions are risk weighted in accordance with CRR Art. 121.

12 Art. 438(c) CRR.
13 Art. 442(a) CRR.
14 Art. 442(b) CRR.
15 Art. 444 CRR.
16 ITS (EU) 2018/634.
Adyen Transparency and Disclosure Report 2019|Page 13

Adyen uses ECAIs in order to determine the risk-weight of exposures belonging to the following three exposure classes:
Central governments or central banks
Institutions
Corporates
Equities in the banking bookAdyen’s exposure to equities in the banking book17 arises from a holding of convertible preferred Visa shares. Adyen
obtained these shares as the result of its previous holding in Visa Europe, which subsequently was acquired by Visa
Inc., and resulted, amongst others, in Adyen being issued shares of Visa Inc. as consideration for the acquisition.

The Visa shares are stated at fair value for EUR 44.1 million, which is based on the fair value of Visa Inc. common stock
multiplied by an initial conversion rate of preferred stock into common stock. These shares have no stated maturity andcarry the right to receive discretionary dividend payments. Over 2019, Adyen gained EUR 13.7 million on non-trading
financial assets mandatorily at fair value through profit or loss, which were recognized in the income statement. Due toa restriction on transfer, the Visa shares cannot be freely traded.
As per 31 December 2019, the total exposure value of equities in the banking book amounted to EUR 44.1 million,
resulting in an own funds requirement of EUR 3.5 million.
Credit portfolio
As per 31 December 2019, Adyen’s total exposures amounted to EUR 2,601,333 resulting in total risk-weighted
exposures of EUR 610,691. The majority of Adyen’s exposures have a short-term duration, with residual maturities ofdays. Exposures relating to equities are perpetual.18

The following tables provide an overview of Adyen’s exposures.
Table 4 Exposures by exposure class (in EUR ‘000)
Average exposures

Total exposures

Total risk-weighted
exposures

894,259

1,141,544

5,168

289,942858,929
42,274

221,451
1,029,474
44,088

190,722205,937
44,088- Other

161,454

164,776

164,776

Total

2,246,856

2,60 1,333

610 ,69 1

Exposure Class
Standardized Approach- Central governments or central
banks- Corporates- Institutions- Equities

Table 4 shows the average amount of exposures over 2019, the total amount of exposures as per 31 December 2019
and the total amount of risk-weighted exposures broken down by exposure class.19
Table 5 Exposures by risk weight (in EUR ‘000)
Risk weight0%
10%
Exposure value
1,089,859
51,68520%
1,043,849

50%
38,375100%
377,565

150%
0

1250%
0

In Table 5, the distribution of exposures across different risk weights is shown.

17 Art. 447 CRR.
18 Art. 442(f) CRR.
19 Art. 442(c) CRR.
Adyen Transparency and Disclosure Report 2019|Page 14

Table 6 Exposure by country (in EUR ‘000)

NL

GB

DE

BE

ES

FR

US

BR

OthersTotal%- Central governments or central
banks

1,011,089

5,825

0

0

0

0

70,32852,1432,159

1,141,544

43.88%- Institutions

257,391

138,046

80,72014,85951,172

20,098331,968

106,793

28,427

1,029,474

40,73%- Corporates

46,01526,654720

11,631

1,838

321

102,990031,282

221,451

39.57%- Equities

0

0

0

0

0

0

44,0880044,088

8.51%- Other

164,776

0

0

0

0

0

0

0

0

164,776

1.69%

Total exposure value

1,479,271

170,525

81,44026,49053,01020,419549,374

158,936

61,8682,601,333

100%

Total %

56.87%

6.56%

3.13%

1.02%

2.04%

0.78%

21.12%

6.11%

2.38%

100%

Exposure Class
Standardised Approach

Additionally, Table 6 provides a geographical breakdown of Adyen’s total exposures to credit risk separately for each exposure class.20

20 Art. 442(c-e) CRR.
15

Market risk
Market risk21 comprises equity risk, interest rate risk, foreign-exchange risk and commodities risk. Adyen does not holdtrading book items and has no commodity positions, therefore it is solely exposed to foreign-exchange risk resulting
from its international operations.
Adyen applies the standardized approach in order to calculate its own funds requirements for market risk. Adyen’s total
risk exposure amount for market risk is EUR 293,780 resulting in an own funds requirement of EUR 23,502.22
Foreign-exchange risk
The strengthening or weakening of the euro impacts the translation of Adyen's net revenues generated from its
international operations that are denominated in foreign currencies, into the euro. Additionally, in connection with
providing its services in multiple currencies, Adyen generally sets its foreign-exchange rates once per day. Adyen may
face financial exposure as a result of fluctuations in foreign-exchange rates between the times that Adyen sets them.
Given that Adyen also holds some merchants' and own funds in non-euro currencies, its financial results are affected by
the translation of these non-euro currencies into euro. While Adyen has measures in place intended to manage its
foreign-exchange risk, namely natural hedges and spot trades for any net open positions, no assurance can be giventhat fluctuations in foreign-exchange rates will nevertheless have a significant impact on Adyen's results of operations.
Adyen is exposed to foreign-exchange risk on its assets and liabilities denominated in currencies other than thefunctional currency, including certain contract assets, its holding of Visa shares and the assets and liabilities of its
subsidiaries. The majority of these assets through which Adyen is exposed to foreign currency risk are denominated in
US dollar.

Operational risk
Adyen recognizes that operational risks 23 are associated with achieving its business objectives. Operational risk
concerns the risk of losses resulting from inadequate or failed internal processes, people and systems or from external
events, including legal risk. Adyen has therefore implemented an internal control framework that is designed to manage
the risks effectively and efficiently and to provide reasonable assurance that objectives can be met.
Merchants’ potential liability for shopper chargebacks
When shoppers claim that a merchant has not performed, the issuing banks can file chargebacks. Adyen seeks to offset
such chargebacks with the payouts to the merchants, but may not be able to succeed in full. While Adyen has
implemented risk mitigation, including withholding funds from the payouts to its merchants, based on assumptions andestimates that Adyen believes are reasonable to cover such eventualities, the measures, including the withheld funds,
may not be sufficient.
Availability of products and services
Adyen's systems and those of its third-party service providers, including data center facilities and communication
networks, have experienced service interruptions and may experience significant service interruptions in the future.
Frequent or persistent interruptions in Adyen's services could cause current or potential merchants to believe that its
systems are unreliable, leading them to switch to a competitor or to avoid Adyen's products and services, and could
permanently harm Adyen's reputation and brand. Moreover, to the extent that any system failure or similar event results
in damages to Adyen's merchants or their business partners, these merchants or partners could seek significant
compensation or contractual penalties from Adyen for their losses, which, even if unsuccessful, could likely be timeconsuming and costly for Adyen to address and divert management attention. Furthermore, frequent or persistentinterruptions could lead to regulatory scrutiny, significant fines and penalties, and/or mandatory and costly changes to
its business practices, and could ultimately cause Adyen to lose existing regulatory licenses or prevent or delay Adyenfrom obtaining additional regulatory licenses that Adyen needs to expand its business.
Information security
Adyen and its merchants, partners and others who use its services, obtain and process a large amount of sensitive data.
Adyen's and its partners' IT systems may be vulnerable to physical and electronic breaches, computer viruses and otherattacks by cyber-criminals, internet fraudsters, employees or others, which could lead to, amongst other things, aleakage of merchants' data, damage related to incursions, destruction of documents, inability or delays in processing
transactions and unauthorized transactions. Any real or perceived privacy breaches or improper use of, disclosure of, oraccess to such data could harm Adyen's reputation as a trusted brand in the handling and protection of this data.

21 Art. 445 CRR.
22 Art. 438(e) CRR.
23 Art. 446 CRR.
16

Although Adyen carries cyber liability insurance that Adyen believes to be reasonable to cover such eventualities, suchinsurance may not be sufficient to cover all potential losses.
Data privacy
Adyen is subject to complex and evolving Dutch, European and other jurisdiction's laws, rules, regulations, orders anddirectives (referred to as "privacy laws") relating to the collection, use, retention, security, processing and transfer of
personally identifiable information about its merchants, their shoppers, third parties and others and their transactionsin the countries where Adyen operates. Much of the personal data that Adyen processes, especially financial information,is regulated by multiple privacy laws and, in some cases, the privacy laws of multiple jurisdictions. In many cases, theselaws apply not only to third-party transactions, but also to transfers of information between or among Adyen and its
subsidiaries. Any failure, or perceived failure, by Adyen to comply with its privacy policies or with any applicable privacy
laws in one or more jurisdictions could result in proceedings or actions against Adyen by governmental entities or others,
including class action privacy litigation in certain jurisdictions, significant fines, penalties, judgments and reputational
damage.
Entrepreneurial culture
Adyen's entrepreneurial culture has been one of the primary drivers of its historical growth. As Adyen grows, it may not
be able to maintain its entrepreneurial company culture, which fosters innovation and talent. If Adyen does not
successfully manage its growth, and is not able to differentiate its business from those of its competitors, drive value forand retain merchants, or effectively align its resources with its goals and objectives, Adyen may not be able to compete
effectively against its competitors, leading to declining growth and revenues.
TalentAdyen's future performance depends substantially on the continued services of key talent and its ability to attract, retain,
and motivate such talent. The loss of the services of any of Adyen's key talent or Adyen's inability to attract highly qualified
key talent may adversely affect its operations.
Integrity
Integrity risk is the risk of non-ethical behavior of management and employees and non-ethical behavior of third parties(merchants, suppliers, advisers) that can be attributed to Adyen, or in which Adyen plays a punishable role. There is quite
some overlap with conduct risk: the current or prospective risk of losses arising from inappropriate supply of financial
services including cases of willful or negligent misconduct. Misconduct generally refers to violations of law, regulations,internal policies, and market expectations of ethical business conduct. If Adyen (or a third party it does business with)fails to comply with laws and regulations, or market expectations of ethical business conduct, supervisory authorities
may initiate legal and regulatory proceedings against Adyen. Integrity risk includes the regulatory compliance risk factor
as described in the 2018 report.
Although Adyen has policies and procedures that it believes are sufficient to comply with currently applicable anti-money
laundering, anti-corruption and sanctions rules and regulations, it cannot guarantee that such policies and procedures
completely prevent situations of money laundering or corruption, including actions by Adyen's employees, agents,
merchants, third-party suppliers or other related persons for which Adyen might be held responsible. Such events may
have severe consequences, including litigation, sanctions, administrative measures, fines, criminal penalties andreputational consequences.
Intellectual property rights
As substantially all of Adyen's intellectual property is developed in-house, the protection of such intellectual property,
including Adyen's platforms, trademarks, copyrights, domain names, trade dress, and trade secrets, is important to thesuccess of its business. Adyen seeks to protect its intellectual property rights by relying on applicable laws andregulations, as well as a variety of administrative procedures. Adyen's intellectual property rights may be contested,circumvented, or found unenforceable or invalid, and Adyen may not be able to prevent third-parties from infringing,
diluting, or otherwise violating them. Any failure to adequately protect or enforce Adyen's intellectual property rights, or
significant costs incurred in doing so, could diminish the value of its intangible assets.
As the number of products in the technology and payments industries increases and the functionality of these products
further overlaps, Adyen may become increasingly subject to intellectual property infringement and other claims. The
ultimate outcome of any allegation is often uncertain and, regardless of the outcome, any such claim, with or without
merit, may be time-consuming, result in costly litigation, divert management's time and attention, and require Adyen to,among other things, stop providing transaction processing and other payment-related services or redesign, stop sellingits products or services, pay substantial amounts to satisfy judgments or settle claims or lawsuits, pay substantial royalty
or licensing fees, or satisfy indemnification obligations that Adyen has with certain parties with whom Adyen hascommercial relationships.

Adyen Transparency and Disclosure Report 2019|Page 17

TaxSocial tolerance for tax avoidance is decreasing and international developments have led to the introduction of stricter
regulations around tax avoidance. Adyen has a low risk appetite to be involved in activities aimed at evasion or avoidanceof tax regulations by itself or third parties through the provision of its services. The determination of Adyen's worldwide
provision for income taxes, value-added taxes and other tax liabilities requires estimation and significant judgment, andthere are many transactions and calculations where the ultimate tax determination is uncertain. Adyen's determinationof its tax liability is always subject to audit and review by applicable domestic and foreign tax authorities. Any adverse
outcome of any such audit or review could have a negative effect on Adyen's business and the ultimate tax outcome may
differ from the amounts recorded in its financial statements.
Basic indicator approach
Adyen applies the basic indicator approach in order to calculate its own funds requirements for operational risk. Under
the basic indicator approach, the own funds requirement for operational risk is equal to 15% of the average over three
years of the relevant indicator. Where the relevant indicator refers to the sum of several elements within the profit andloss statement of the institution.

Adyen’s total risk exposure amount for operational risk is EUR 661,400 resulting in an own funds requirement of EUR
52,912.24
Table 7 shows the build-up of the relevant indicator over the last three years.
Table 7: relevant indicator (in EUR ‘000)
Build-up relevant indicator

31-12-17

31-12-18

31-12-19

218,043

347,814492,383

Relevant
indicator
352,746

Own funds
requirement
52,912

Capital buffers
In addition to a Pillar I and Pillar II requirement, Adyen is subject to the countercyclical buffer25 requirement.

Geographical distribution of credit risk
Resulting from its international operations, Adyen has exposures to counterparties in several countries. The
geographical distribution of Adyen’s credit exposures relevant for the calculation of the countercyclical capital buffer are
shown in Annex II.
As can be concluded from Table 8 below, the institution-specific countercyclical capital buffer for Adyen is 0.00%.
Table 8: Countercyclical buffer (in EUR ‘000)
Row
Institution-specific countercyclical capital buffer

31-Dec-19

010

Total risk exposure amount

1,565,871

020

Institution specific countercyclical capital buffer rate

0.00%

030

Institution specific countercyclical capital buffer requirement0

Leverage
Leverage means the relative size of an institution’s assets and off-balance sheet obligations as compared to theinstitution’s own funds.

Leverage ratio
The leverage ratio26 is a monitoring tool used to assess the risk of excessive leverage within institutions. It is defined asTier 1 capital divided by a non-risk-based measure of the on- and off-balance sheet items. By restricting the build-up ofleverage, the leverage ratio aims to avoid destabilizing deleveraging processes that can damage the broader financial
system and the economy.

24 Art. 438(f) CRR.
25 Art. 440 CRR.
26 Art. 451 CRR.
Adyen Transparency and Disclosure Report 2019|Page 18

The Banking Package introduces a binding 3% leverage ratio as a pillar 1 requirement. In the CRR the leverage ratio iscurrently solely a reporting and disclosure requirement. The 3% leverage ratio requirement will be applicable from 24months after the entry into force (28 June 2021).
As per 31 December 2019 Adyen had a leverage ratio of 29%. Annex III provides detailed information on both thereconciliation between total assets as published in the financial statements and the total exposure measure, andprocesses used to manage the risk of excessive leverage.

Adyen Transparency and Disclosure Report 2019|Page 19

Disclosures on Pillar II
Pillar II sets out mandatory processes for institutions and supervisors to fulfill capital adequacy and liquidity adequacy
requirements. Adyen combines the assessment of these requirements within its ICLAAP. This chapter describes
Adyen’s ICLAAP and specifically addresses interest rate risk in the banking book.

Internal capital adequacy assessment process
Adyen has designed, implemented, maintains and monitors internal risk management and control systems to identify
and manage risks associated with its strategy and activities.
Adyen uses stress testing to understand the impact of stress events on its overall risk profile. The stress scenarios are
based on exceptional but plausible events with an adequate degree of severity. Stress testing is performed inaccordance with EBA guidelines on stress testing. The results from stress tests are also used as an input for fine-tuning
Adyen's risk appetite, risk capacity and risk limits as a feedback mechanism. In 2019 Adyen’s Internal Capital and
Liquidity Adequacy Assessment Process (ICLAAP27) showed that Adyen has a high financial shock absorption capacity
and adequate levels of capital and liquidity.

Interest rate risk in the banking bookInterest rate risk on financial instruments included in the banking book 28 could arise from adverse movements inunderlying interest rates. Although significant liabilities towards the merchants are present, these liabilities are noninterest bearing and are settled at short notice.
Adyen is exposed to interest rate risk in the banking book in relation to its High-Quality Liquid Assets (HQLA): cash heldat central banks and government bonds. However, cash balances of Adyen are not significantly exposed to interest raterisk due to the fact that cash is used to settle the current liabilities towards the merchants at short notice. The nominal
values of the bonds held-to-maturity are minimal as compared to the overall financial instruments balance, are shortterm in nature and are held-to-maturity leading to minimal interest rate risk. As a result of the nature of the products on
the Adyen balance sheet the remaining interest rate risk is considered to be minimal.

27 Art. 438(a) CRR.
28 Art. 448 CRR.
Adyen Transparency and Disclosure Report 2019|Page 20

Remuneration policy
Adyen remuneration policy
The remuneration policy of Adyen has been published on the company’s website. There has been no change in the
remuneration policy in 2019. As a result of the implementation of the Shareholder Rights Directive II in Dutch legislation
as of December 1, 2019, it will be proposed in the General Meeting of Shareholders of May 26, 2020 to adjust the
remuneration policy to the new legislation.

Remuneration principles
The objective of Adyen’s remuneration policy is to ensure that we recruit and retain the best talent worldwide. Adyen’s
remuneration policy is rooted in the Adyen Formula and is in full compliance with all relevant international and local
legislation and regulations.
Our remuneration policy has the Adyen Formula at heart. The Adyen Formula consists of eight points on how we aresuccessful to create long-term value for our merchants.
Our remuneration policy is consistent with, and promotes, sound and effective risk management and has always beenaligned with our strategy to create long-term value for our merchants. As such, our remuneration policy does notcontain incentives that exclusively benefit staff members themselves.
By retaining the remuneration principles set out in our remuneration policy, the remuneration is consistent with andpromotes sound and effective risk management. As such, these remuneration principles also allow remuneration tocontribute to long-term value creation and to discourage improper risk-taking.

Remuneration package
The size of a remuneration package is based on the scope of responsibilities, the employee’s experience andperformance, and the local market circumstances, which may differ from country to country.
A remuneration package may consist of a base salary, share-related remuneration, pension entitlements and other
emoluments. For certain employees a remuneration package may also include variable income.
Adyen has the right pay mix in place to mitigate short-term orientation and contribute to the long-term performance ofthe company. This is specifically achieved by awarding staff members, including the Management Board, with (longterm) share-related remuneration. The purpose of the share-based payments is to put staff members in a financial
ownership-like position where shares are concerned and for them to obtain an economic interest in the pursuit ofAdyen’s long-term objectives such as sustainable growth, development, profitability and financial success of Adyen.

Variable remuneration
Adyen observes the laws and regulations applicable to the company, which includes the remuneration regulations asprovided in the Act on Remuneration policy Financial Undertakings (Wet beloningsbeleid financiële ondernemingen)and the EBA Guidelines on Sound Remuneration Policies (EBA Guidelines) (the Remuneration Regulations).
Adyen's remuneration policy is in line with the Remuneration Regulations.
Certain employees may be rewarded with variable remuneration. Variable remuneration, if awarded, will at all times notexceed the fixed to variable remuneration ratios as provided in the Remuneration Regulations. In accordance with theRemuneration Regulations, variable remuneration will be subject to hold back and claw back instruments. In thefinancial year 2019, no variable remuneration has been adjusted or clawed back in accordance with these instruments.
In the financial year 2019, Adyen has not rewarded any variable remuneration to the members of the Management
Board or any other identified staff. Adyen does not award variable remuneration to the Supervisory Directors.

Adyen Transparency and Disclosure Report 2019|Page 21

Identified staff
In 2019 there were 21 employees (2018: 18) identified as “Identified Staff” (staff that is considered to have a material
impact on the risk profile of Adyen). None of these employees was entitled to a performance related bonus in 2019. As
such Adyen avoids short-term incentives and focus for all staff that is considered to have a material impact on ourbusiness, including the Managing Directors, thereby contributing to the long-term performance and value creation of
the company.
Table 9 provides an overview of remuneration awarded to identified staff over 2019, split into fixed and variable
remuneration.
Table 9: quantitative information on remuneration (in EUR ‘000)
Senior management

Number of beneficiaries

All other

Total

10

11

21

2,934

2,080

5,014

-

-

-

Cash

-

-

-

Shares---Share-linked instruments

-

-

-

Other types

-

-

-

Ratio (variable to fixed)

-

-

-

Fixed remuneration
Cash based
Instrument based
Variable remuneration

Total annual remuneration
In 2019 there were nil employees to whom total annual remuneration (Including employer pension contributions andany severance payments made) of EUR 1 million or more was awarded.

Nomination and Remuneration Committee
The Nomination and Remuneration Committee consist of four (4) Supervisory Directors as determined by theSupervisory Board. The current remuneration policy and remuneration of the Managing Directors was adopted at theshareholder meeting on April 17, 2018.

Remuneration for the Management Board
The remuneration policy that applies to the Managing Directors is in line with the remuneration policy that applies to all
staff. Adyen’s Management Board remuneration is consistent with and promotes a sound and effective risk
management and has always been aligned with Adyen’s strategy to create long-term value for its merchants. As such,the remuneration policy does not contain incentives that exclusively benefit Managing Directors themselves.
As of 2018 and in line with (i) the Act on Remuneration Policies in Financial Enterprises(Wet beloningsbeleid financiële ondernemingen), and (ii) the Guidelines on Remuneration Policies and Practices asformally adopted on 10 December 2010 by the Committee of European Banking Supervisors, Adyen does not award
variable remuneration to the Managing Directors.
The remuneration of the Managing Directors is determined by the Supervisory Board with due observance ofthe remuneration policy as adopted by the General Meeting.
The Managing Directors do provide the Nomination and Remuneration Committee with their views with regard to theamount and structure of their own remuneration. In 2019 base salaries of the Managing Directors were increased with
8%, in line with the average salary increase of a staff member.

Adyen Transparency and Disclosure Report 2019|Page 22

The Management Board’s remuneration is compared to AEX companies. The Management Board remuneration is
below the median of the benchmark. This discrepancy is accepted for the current Managing Directors. To attract
future Managing Directors, the remuneration package for new Managing Directors may be adjusted to the market.
In line with the revised Dutch Corporate Governance Code, Adyen performed a scenario analysis and back-test on
Management Board remuneration. All scenarios resulted in the same outcome as the remuneration of the Managing
Directors is not linked to variable remuneration elements. The internal ratio of the Managing Directors’ remunerationand that of a representative reference group was determined. For this ratio, Adyen deems most relevant the total directcompensation of the CEO compared to the average total direct compensation of all Adyen employees worldwide. For
the CEO a ratio of 7:1 applies (2018: 7:1). For the other Managing Directors, a ratio of 5:1 applies (2018: 6:1).

Adyen Transparency and Disclosure Report 2019|Page 23

Annexes
Annex I Own funds
Capital instruments main features template as derived from ITS (EU) 1423/2013.29
See: Attachment 1 9 Adyen Pillar III Templates 1 7 -3 -2020.xls (Tab: Shares)

Annex II Countercyclical capital buffer
Geographical distribution of credit exposures relevant for the calculation of the countercyclical capital buffer template
as derived from RTS (EU) 2015/1555.30
See: Attachment 1 9 Adyen Pillar III Templates 1 7 -3 -2020.xls (Tab: CCyB1 (2))

Annex III Leverage
CRR leverage ratio – Disclosure template (quantitative) as derived from ITS (EU) 2016/200.31
See: Attachment 1 9 Adyen Pillar III Templates 1 7 -3 -2020.xls (Tab: Leverage1)
CRR leverage ratio – Disclosure template (qualitative) as derived from ITS (EU) 2016/200.32
See: Attachment 1 9 Adyen Pillar III Templates 1 7 -3 -2020.xls (Tab: Leverage2)

29 Art. 437(1)(b) CRR.
30 Art. 440(1)(a) CRR.
31 Art. 451(1)(a-c) CRR.
32 Art. 451(1)(d&e) CRR.
Adyen Transparency and Disclosure Report 2019|Page 24

Annex I Own funds
Capital instruments main features template as derived from ITS (EU) 1423/2013.33
Ordinary shares
1

IssuerAdyen N.V.

2

Unique identifier

NL0012969182

3

Governing law(s) of the instrument

The shares are governed by the laws of
the Netherlands

Regulatory treatment
4

Transitional CRR rules

Common Equity Tier 1

5

Post-transitional CRR rules

Common Equity Tier 1

6

Eligible at solo / (sub-)consolidated / solo & (sub-)consolidated

Consolidated

7

Instrument type

CET1 as published in the EBA list (art.
26(3))

8

Amount recognised in regulatory capital

80,000,000

9Nominal amount of instrument

0.01

9a

Issue price

240

9b

Redemption priceNot applicable

10

Accounting classification

Shareholders' equity

11

Original date of issuance

13 June 201812

Perpetual or dated

Perpetual13

Original maturity dateNo maturity

14

No

15

Issuer call subject to prior supervisory approval
Optional call date, contingent call dates and redemption
amount16

Subseqeuent call dates, if applicableNot applicableNot applicable

Coupons / dividends
17

Fixed or floating dividend/coupon

Floating

18

Coupon rate and any related index

Not applicable

19

Existence of a dividend stopper

No
Fully discretionary - no dividend
pushers, dividend stoppers or ACSM

20b

Fully discretionary, partially discretionary or mandatory (interms of timing)
Fully discretionary, partially discretionary or mandatory (interms of amount)

21

Existence of step up or other incentive to redeemNo22

Non-cumulative or cumulative

Non-cumulative

23

Convertible or non-convertible

Non-convertible

24

If convertible, conversion trigger(s)Not applicable25

If convertible, fully or partially

Not applicable26

If convertible, conversion rates

Not applicable27

If convertible, mandatory or optional conversion

Not applicable28

If convertible, specify instrument type convertible into

Not applicable

20a

Fully discretionary

33 Art. 437(1)(b) CRR.
Adyen Transparency and Disclosure Report 2019|Page 25

29

If convertible, specify issuer of instrument it converts into

Not applicable30

Write-down features

No31

If write-down, write-down trigger(s)Not applicable32

If write-down, full or partial

Not applicable33

If write-dowm, permanent or temporary

Not applicable34

If temporary write-down, description of write-up mechanism

Not applicable

35

Position in subordination hierarchy in liquidation

Subordinated to all claims

36

Non-compliant transitioned features

No37

If yes, specify non-compliant feature

Not applicable

Adyen Transparency and Disclosure Report 2019|Page 26

Annex II Countercyclical capital buffer
Geographical distribution of credit exposures relevant for the calculation of the countercyclical capital buffer template as derived from RTS (EU) 2015/1555.34
General Credit exposures
Exposure value for SA(AT) Republic of Austria(AU) Australia(BE) Kingdom of Belgium(CN) People's Republic of China(DE) Federal Republic of Germany(ES) Kingdom of Spain(FI) Republic of Finland(FR) French Republic(GB) Great Britain and Northern Ireland(HK) Hong Kong
(ID) Republic of Indonesia(IE) Ireland(JP) Japan(KR) Korea, Republic of(MY) Malaysia(NL) Kingdom of Netherlands(PH) Republic of the Phillipines(PL) Republic of Poland(PT) Portuguese Republic(RU) Russian Federation(SE) Kingdom of Sweden(SG) Republic of Singapore(SK) Slovak Repuplik(TR) Republic of Turkey(US) United States of America

Own funds requirementsof which: Generalcredit exposures

Total

Own funds
requirements
weights

501,269.76
9,301,488.80
11,630,929.77
5,302,276.16
720,290.16
1,838,175.53
20,494.42
321,026.65
24,653,671.03
230,863.05
500,398.88
1,371,225.00
1,473,346.84
129,431.17
869,252.54
217,963,189.67
15,632.47
145,334.39
149,543.50
98,082.48
10,100,071.17
2,755,265.09
7,356.47
311,218.68
144,809,222.35

40,101.58
744,119.10
466,350.12
424,182.09
57,623.21
147,054.04
1,639.55
25,682.13
1,190,189.96
18,469.04
40,031.91
109,698.00
117,867.75
10,354.49
69,540.20
17,437,055.17
1,250.60
11,626.75
11,963.48
7,846.60
808,005.69
220,421.21
588.52
24,897.49
10,491,806.15

40,101.58
744,119.10
466,350.12
424,182.09
57,623.21
147,054.04
1,639.55
25,682.13
1,190,189.96
18,469.04
40,031.91
109,698.00
117,867.75
10,354.49
69,540.20
17,437,055.17
1,250.60
11,626.75
11,963.48
7,846.60
808,005.69
220,421.21
588.52
24,897.49
10,491,806.15

0.00
0.02
0.01
0.01
0.00
0.00
0.00
0.00
0.04
0.00
0.00
0.00
0.00
0.00
0.00
0.54
0.00
0.00
0.00
0.00
0.02
0.01
0.00
0.00
0.32

435,219,056.03

32,478,364.86

32,478,364.86

1.00Countercyclicalcapital bufferrate

34 Art. 440(1)(a) CRR.
27

Annex III Leverage
CRR leverage ratio – Disclosure template (quantitative) as derived from ITS (EU) 2016/200.35
Table LRSum: Summary reconciliation of accounting assets and leverage ratio
exposures
1

Total assets as per published financial statements

2

Adjustment for entities which are consolidated for accounting purposes but areoutside the scope of regulatory consolidation

3(Adjustment for fiduciary assets recognised on the balance sheet pursuant to theapplicable accounting framework but excluded from the leverage ratio total
exposure measure in accordance with Article 429(13) of Regulation (EU) No
575/2013)

4

Adjustments for derivative financial instruments

5

Adjustment for securities financing transactions (SFTs)

6

Adjustment for off-balance sheet items (ie conversion to credit equivalent amounts
of off-balance sheet exposures)

EU-6a(Adjustment for intragroup exposures excluded from the leverage ratio total
exposure measure in accordance with Article 429(7) of Regulation (EU) No
575/2013)

EU-6b(Adjustment for exposures excluded from the leverage ratio total exposure
measure in accordance with Article 429(14) of Regulation (EU) No 575/2013)

7

Other adjustment

8

Leverage ratio total exposure measure

Applicable
Amount
2,608,974-69,365

Table LRCom: Leverage ratio common disclosure

2,539,609

CRR
leverageratio
exposuresOn-balance sheet exposures (excluding derivatives and SFTs)
1

On-balance sheet items (excluding derivatives, SFTs and fiduciary assets, but
including collateral)

2(Asset amounts deducted in determining Tier 1 capital)

3

Total on-balance sheet exposures (excluding derivatives, SFTs andfiduciary assets) (sum of lines 1 and 2)

4

Replacement cost associated with all derivatives transactions (ie net of eligible
cash variation margin)5

Add-on amounts for PFE associated with all derivatives transactions (mark- tomarket method)

2,608,974-69,3652,539,609

Derivative exposures

EU-5a
6

Exposure determined under Original Exposure Method
Gross-up for derivatives collateral provided where deducted from the balance
sheet assets pursuant to the applicable accounting framework

35 Art. 451(1)(a-c) CRR.

28

7

(Deductions of receivables assets for cash variation margin provided in derivatives
transactions)

89(Exempted CCP leg of client-cleared trade exposures)
Adjusted effective notional amount of written credit derivatives

10(Adjusted effective notional offsets and add-on deductions for written credit
derivatives)

11

Total derivatives exposures (sum of lines 4 to 10)
SFT exposures

12

Gross SFT assets (with no recognition of netting), after adjusting for sales
accounting transactions

12a
12b
13
14

Gross SFT assets (with no recognition of netting)
Adjustments for sales accounting transactions(Netted amounts of cash payables and cash receivables of gross SFT assets)
Counterparty credit risk exposure for SFT assets

EU14a

Derogation for SFTs: Counterparty credit risk exposure in accordance with Articles
429b(4) and 222 of Regulation (EU) No 575/2013

15
EU15a
16

Agent transaction exposures

17
18
19

(Exempted CCP leg of client-cleared SFT exposure)
Total securities financing transaction exposures (sum of lines 12 to 15a)Other off-balance sheet exposures
Off-balance sheet exposures at gross notional amount(Adjustments for conversion to credit equivalent amounts)
Other off-balance sheet exposures (sum of lines 17 to 18)
Exempted exposures in accordance with Article 429(7) and (14) ofRegulation (EU) No 575/2013 (on and off balance sheet)

EU19a(Intragroup exposures (solo basis) exempted in accordance with Article 429(7) ofRegulation (EU) No 575/2013 (on and off balance sheet))

EU19b(Exposures exempted in accordance with Article 429 (14) of Regulation (EU) No
575/2013 (on and off balance sheet))
Capital and total exposure measure

20

Tier 1 capital

21

Leverage ratio total exposure measure (sum of lines 3, 11, 16, 19, EU-19aand EU-19b)

22

Leverage Ratio

745,475
2,539,609

Leverage Ratio
29.35%

Choice on transitional arrangements and amount of derecognised fiduciary
items
EU-23

Choice on transitional arrangements for the definition of the capital measure

EU-24

Amount of derecognised fiduciary items in accordance with Article 429(11) ofRegulation (EU) No 575/2013

Adyen Transparency and Disclosure Report 2019|Page 29

CRR leverage ratio – Disclosure template (qualitative) as derived from ITS (EU)2016/200.36

Table LRSpl: Split-up of on balance sheet exposures (excluding derivatives, SFTs
and exempted exposures)

CRR
leverageratio
exposures

EU-1

Total on-balance sheet exposures (excluding derivatives, SFTs, and exempted
exposures), of which:

2,539,609

EU-2
EU-3
EU-4
EU-5

Trading book exposures
Banking book exposures, of which:Covered bonds
Exposures treated as sovereigns

EU-6

Exposures to regional governments, MDB, international organisations and PSE nottreated as sovereigns

EU-7
EU-8
EU-9
EU-10
EU-11
EU-12

2,539,609
1,028,135

Institutions
Secured by mortgages of immovable properties
Retail exposures
Corporate
Exposures in default
Other exposures (eg equity, securitisations, and other non-credit obligation
assets)

1,081,159

221,451
208,864

36 Art. 451(1)(d&e) CRR.

Adyen Transparency and Disclosure Report 2019|Page 30