Message from the CEO
“ A big reason why I work for Adyen is because of the Formula which keeps us close, even with colleagues around the world. If all I cared about were projects, I could work for any other company, but I care a lot about the spontaneous ideation that happens in our offices, where everyone’s opinion is welcomed, no matter what team you’re on. ”
Adyen operates a global payments platform, integrating the full payments stack — gateway, risk management, processing, issuing, acquiring, and settlement. Adyen Issuing was launched in 2019, and enables merchants to provide virtual and physical cards to their customers. Issuing meets various merchant needs, as it gives them the ability to issue cards for a variety of uses cases, either online, in-app, and in-store. The Adyen offering includes a common back-end infrastructure for authorizing payments across merchants’ sales channels, as well as feature-rich APIs.
The platform services a range of globally-operating merchants across different verticals, connecting them directly to Visa, Mastercard, and many other payment methods. Additionally, it provides a high level of reliability, performance, and data insights.
For this service of payments processing, Adyen earns processing and settlement fees — gateway and acquiring services, respectively — as well as some smaller fees related to products or functionalities aimed at reducing complexity and friction for merchants. For a full breakdown of fees, refer to Note 2 ‘Revenue and segment reporting’ of the attached Consolidated Financial Statements for more information.
The Adyen value chain
“ At Adyen, we’ve really been encouraged to make blocks in our calendar and take time for ourselves to breathe and recharge. This past year, my team especially got creative in scheduling activities just for the sake of collaborating on something fun that also keeps us productive. ”
Arielle, Business Controller
“ In every tragedy, it helps to focus on opportunities. This has been an opportunity to see and guide my
children's learning — it’s an opportunity for them to observe my spouse and me at work. An opportunity for Adyen colleagues to connect at a deeper, more personal level than we could at the office. ”
Sunil, VP of product
We build to benefit all merchants (not just one)
We don’t hide behind email, instead we pick up the phone
We make good choices to build an ethical business and drive sustainable growth for our merchants
We talk straight without being rude
We launch fast and iterate
We include different people to sharpen our ideas
Winning is more important than ego; we work as a team — across cultures and time zones
We create our own path and won’t be slowed down by “stewards”
“ It’s because we’re all in this together, including our merchants, that we’re able to see more color in each others’ lives. Seeing how we’re all struggling to navigate this new normal has allowed us to get to know people in a different way, and has improved the quality of our relationships. ”
Wouter, Implementation Manager
Key to our long-term success is cultivating an inclusive environment — one designed with equity in mind. This philosophy is also reflected in the Adyen Formula, wherein we stress the importance of involving others to sharpen our ideas. The broader the set of philosophies the team encompasses, the better we can foster innovation and avoid groupthink.
In 2020 we founded the Diversity, Equity, and Inclusion (DEI) working group — a team of global Adyen colleagues that help identify key areas to improve on from a DEI perspective. Ever since we founded Adyen, we focused on cultivating a culture of diversity and inclusion. In 2020, we added equity as a central cultural value to our approach of building the team. To us, equity means that there’s no one-size-fits-all approach to building a team - and that each team members’ professional and personal needs should be addressed on an individual level.
We view fostering a culture of Diversity, Equity, and Inclusion as a responsibility of the entire Adyen team, and for which we hold ourselves accountable. We need everyone at Adyen to contribute for us to be able to build a team with Diversity, Equity, and Inclusion at its core.
2020 FTE growth
Based on the DEI working group’s observations, we broadly assessed and improved several HR processes during the year. In recruitment, we ensured all job postings are written in gender-neutral language, and focused intently on increasing our accessibility for historically underrepresented groups, especially at the earliest stage of the recruitment process, and implemented company-wide unconscious bias trainings.
In the interviewing process, we focused on minimizing biases through balanced gender representation in interview panels, and by developing interview structures that hone in on skills and experience — consciously veering away from selecting team members based on subjective personality and/or character traits.
Gender balance is an area in which we actively work to do better, with current metrics at 34% female team members and 29% of team lead positions filled up by women, and 16% and 40% in our Management Board and Supervisory Board, respectively.
With a team consisting of over 100 nationalities and perspectives from all over the world, there is a lot to learn from each other. Over the course of building the company, we have seen many employee resource groups organically emerge. We actively support these bottom-up initiatives, as this is how most initiatives originate at Adyen — from the company-wide strategy on down. One example of these is the LGBTQ+ community, Adyen Pride.
The three programs (Adyen Impact, Footprint, Local Initiatives) that together make up our social responsibility plan are strongly aligned with the United Nations’ Sustainable Development Goals (SDGs). We acknowledge the importance of the SDGs as key metrics in the long-term prosperity of people and planet.
In the Local Initiatives program, we enable and empower our employees to address locally relevant matters. Over the course of 2020, we expanded our local initiatives to strengthen our culture of giving back to our communities. This year, we organized more initiatives across regions to support a broad range of causes.
Externally, our Impact technology leverages the Adyen platform and helps our merchants make a positive social and environmental impact. This year we expanded our Impact product portfolio by building Offsets in Checkout, a feature of our Checkout product that allows shoppers to carbon compensate for their purchases. By working together with our merchants and partnering with charities, we can have a long-term, scalable, and multiplied impact.
Being a tech company in the payments space, we want to make responsible choices that contribute positively, one payment at a time. Take a deeper look at how our Footprint, Local Initiatives, and Impact programs help make that a reality in the following sections.
Adyen’s 2020 operational GHG emissions, measured in tCO2e3
Scope 1 — 223.62 tCO2e
Scope 1 emissions are emissions from sources owned or controlled by us — such as refrigerants used to heat or cool our offices.
Scope 2 — 2,341.30 tCO2e
Scope 2 emissions cover indirect emissions, such as purchased electricity for our buildings. To make it tangible: when charging a smartphone at one of our offices, these emissions tie into scope 2.
Scope 3 — 6,064.85 tCO2e
These emissions stem from activities that are not directly owned or controlled by Adyen — think of air travel, hotel stays, employees’ homes, and data center energy consumption.
3 The measure for our greenhouse gas emissions is tonnes of Carbon Dioxide Equivalents (tCO2e) — covering the six greenhouse gases defined in the Kyoto Protocol by the United Nations Framework Convention on Climate Change. These six gases are carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perufluorocarbons (PFCs) and sulphur hexafluoride (SF6).
Normally, the majority of our company’s emissions are due to travel from visiting each other in our 24 offices and keeping them running. However, due to the pandemic, we reduced our overall tCO2e as reflected in the
audit results above. In gathering these results, we decided to include an estimation of increased CO2 emissions coming from our employees’ homes. As such, we remain a carbon neutral company by offsetting all emissions from our business operations, including the impact of home offices.
We always ask why and are critical, we don’t just tick the box
We all make mistakes, we seek help and share as soon as we find out
Your work impacts others, involve them
Always look for improvement, automate processes continually & challenge the status quo
We evidence our work at the source, we don’t replicate it
The formula guides our behavior, policies support it
If you see a problem, act on it
Adyen has adopted the three-lines-of-defense 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 first line owns and manages risks, the second line sets control standards and monitors adherence to them, and the third line—internal audit—provides assurance on the adequacy of the first two. The Corporate Risk and Internal Control team supports the Management Board and Risk Committee with its risk oversight, management of the risk framework, setting of the relevant risk management policies, risk appetite, and independent monitoring of key risks, limits, and controls.
“ It’s unique how Adyen has kept us together. Our team always sends small gifts and plans events. These gestures mean a lot, and I don’t feel like we’ve lost connection with each other. We even schedule meetings specifically to talk about life and personal problems, which helps when working together as you understand each other on a personal level as well. ”
Pedro, Team Lead, Data Infrastructure
On January 20, 2020, an Extraordinary General Meeting was held to reappoint Joep van Beurden as Supervisory Director. He was reappointed for a period of 4 years, ending January 2024.
Adyen holds a General Meeting of shareholders within six months of the end of the financial year. The agenda for this meeting includes (i) the adoption of the annual accounts, (ii) the content of the Annual Report, (iii) the remuneration policy and remuneration of the Supervisory Board, (iv) the release from liability of the members of the Management Board and the Supervisory Board for their performance during the financial year, (v) the policy of the Company on additions to reserves and on distributions of profits, (vi) any proposal to distribute profits, (vii) the auditor’s report, and (viii) any other proposals placed on the agenda by the Management Board.
General Meetings can be held as often as the Management Board or the Supervisory Board deem necessary. A General Meeting is also convened in case of a decision entailing a significant change in the identity or character of the Company or its business. One or more shareholders representing at least the statutory threshold of 3% of the voting rights may request that the Management Board places items on the agenda of a General Meeting. Such a request must be honored by the Management Board provided that the request is received in writing at least 60 days before the date of such a meeting.
The Annual General Meeting of 2020 was held on May 26, 2020. Aside from the topics of this meeting as listed above, Piero Overmars was re-appointed as Chairman and member of the Supervisory Board for a period of four years, effective January 20, 2021.
Our next annual General Meeting will be held on June 3, 2021.
Each share reflects one vote in the General Meeting. Subject to certain exceptions provided by Dutch law or the Articles of Association, resolutions of the General Meeting are passed by an absolute majority of votes cast. Votes can be cast at the General Meeting either in person or by proxy.
The General Meeting may pass a resolution to amend the Articles of Association with an absolute majority of the votes cast. A proposal to amend the Articles must be made by the Management Board and must be approved by the Supervisory Board. When a proposal to amend the Articles of Association is made to the General Meeting, the intention to propose such resolution must be stated in the relevant notice convening the General Meeting.
Shares can only be issued pursuant to a resolution of the General Meeting, unless the General Meeting has designated this authority to the Management Board. During the Annual General Meeting held on May 26, 2020, the General Meeting granted the Management Board – subject to the Supervisory Board’s approval – the authority to issue ordinary shares or to grant rights to subscribe for ordinary shares for a term of 18 months as of May 26, 2020 for up to 10% of the total number of shares issued at the time of the General Meeting for any purpose. Hence, within the aforementioned limit shares can be issued by a decision of the Management Board, which allows the Management Board to react promptly when for example a business opportunity arises which requires such issuance. This decision must be approved by the Supervisory Board. Any issuance exceeding the aforementioned limit needs approval by the General Meeting.
In addition, the General Meeting granted the Management Board – subject to the Supervisory Board’s approval – the authority to restrict or exclude applicable pre-emptive rights when issuing ordinary shares or granting rights to subscribe for ordinary shares for a term of 18 months as of May 26, 2020.
Shares can only be repurchased by Adyen pursuant to a resolution of the General Meeting and subject to any required regulatory approvals. The General Meeting may designate the authority to repurchase shares to the Management Board. During the General Meeting held on May 26, 2020, the shareholders granted the Management Board – subject to the Supervisory Board’s approval – the authority to acquire shares in the capital of the Company, either through purchase on a stock exchange or otherwise. The authority applies for a term of 18 months as of May 26, 2020, under the following conditions: the repurchase (i) may constitute up to 10% of the total number of shares issued at the time of the General Meeting; (ii) provided that the Company will not hold more shares in stock than 10% of the issued share capital; and (iii) at a price not less than the nominal value of the shares and not higher than 110% of the opening price at Euronext Amsterdam at the date of the acquisition. Any repurchases exceeding these limits need approval by the General Meeting.
Adyen’s issued capital and voting rights are notified to the AFM from time to time. This reporting can be found in the register issued capital on www. afm.nl. Shareholders owning 3% or more of the issued capital and/or voting rights of a listed company must report this to the Dutch Authority for the Financial Markets (AFM) as soon as the threshold is reached or exceeded. This reporting by shareholders can be found in the ‘Register of substantial holdings and gross short positions' at www.afm.nl.
The Supervisory Board is pleased to present its report for 2020 — a challenging year for society and many businesses due to the COVID-19 pandemic. In 2020, the Adyen platform processed €303.6 billion, growing 27% year-on-year. Adyen has proven resilient due to the further diversification of its merchant base across geographies and verticals, despite the difficult macroeconomic environment continuing to be a disrupting factor to many of its merchants. In 2020, Adyen was able to grow and onboard the team from a distance, totaling 1,747 FTE as of December 31, 2020.
This report includes a more specific description of the Supervisory Board’s activities during the financial year 2020 and other relevant information on its functioning.
Adyen has established a two-tier board structure consisting of the Management Board and the Supervisory Board, as explained in the section ‘Governance’ of this Annual Report. The Supervisory Board functions as a separate corporate body and is fully independent from the Management Board. The composition of the Supervisory Board is such that members are able to act independently of one another, the Management Board and any particular interest and allows for properly carrying out all Supervisory Board tasks, including staffing of committees. The Supervisory Board is capable of assessing the broad outline of the overall policy of the Company and of the most important risks incurred. The background, knowledge and expertise of each Supervisory Director adds to the Board’s effectiveness, enabling it to fulfil its duties in the Company’s best interest.
As of December 31, 2020, the Supervisory Board is composed of four members — Piero Overmars (Chairman), Delfin Rueda Arroyo, Joep van Beurden and Pamela Joseph. On February 12, 2021, Caoimhe Keogan was appointed as Adyen’s fifth Supervisory Director.
Piero Overmars serves as a member of the Supervisory Boards of Amsterdam UMC and Dura Vermeer Groep NV. Previously, he served as a member of the Management Board of Randstad Beheer B.V. and was Chairman of the Supervisory Boards of Nutreco and SNS Reaal. He also served as President of the Nyenrode Foundation, following an extensive career at ABN Amro that culminated in a Board Member position. Piero Overmars holds an MBA from Nyenrode Business University.
Delfin Rueda Arroyo serves as CFO and Vice-Chair of the Executive Board and Management Board of NN Group, and is a member of the Supervisory Board of Allfunds Bank S.A.U. Previously, he was CFO and member of the Management Board of ING Insurance, following an extensive career at Andersen Consulting, UBS, JP Morgan and Atradius. Delfin Rueda Arroyo holds a master 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 and member of the Supervisory Board of the Twente University of Technology (the Netherlands). In additions to these positions, Joep serves as a member of the Advisory Board of PlantLab. 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. Joep van Beurden holds a degree in Applied Physics from Twente University of Technology.
Pamela Joseph is CEO and member of the Management Board of Clearent, holds a position as Chair of the Board of Directors of TransUnion and is a non-executive member in the Board of Directors of Paychex. In addition to these positions, Pamela serves as Operating Partner at Advent International. 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).
Caoimhe Keogan serves as CPO (Chief People Officer) for Aveva Group plc. Previously, she served as Chief People Officer for Moneysupermarket Group plc, and as SVP People, Places & Community at SoundCloud. Prior to these roles, she was Senior HR Business Partner at Google. Caoimhe Keogan holds a degree in Occupational Psychology from Queen’s University Belfast (UK).
The Supervisory Board convened for eight meetings, of which two were held at the offices of Adyen, and six were held via videoconferencing due to the COVID-19 pandemic. The meetings were held in the months February, March, April, May, October and December. Members of the Management Board also attended these Supervisory Board meetings.
In 2020, Pamela Joseph was absent at one Supervisory Board meeting. Her attendance rate was therefore 83%. The attendance rate of the other Supervisory Directors was 100%.
The Supervisory Board meets at a minimum each half year before the publication of the half-yearly results, and discusses these results with the Management Board, as well as the draft press release and auditor’s report on the procedures performed. These documents are first discussed in the Audit Committee meeting prior to the Supervisory Board meeting.
In addition to the regular agenda for the Supervisory Board meeting – which includes topics such as risk management, business performance, strategic updates and the development of the financials – the Supervisory Board discussed diversity, culture, social responsibility and sustainability, the accounting error as published in the Q3 Trading Update, compliance with relevant legislations, relations with regulators, brand positioning and the preparation and evaluation of the Annual General Meeting of Shareholders. Furthermore, deep dive session on specific topics relevant to Adyen’s business were held, such as Issuing, Customer Relations and Operational Excellence.
The Supervisory Board also discussed Adyen’s strategy including its workstreams and reviewed proposed annual and other financial reporting. In 2020, the Supervisory Directors completed trainings on data privacy, security and compliance.
The Company Secretary attended all Supervisory Board meetings and Committee meetings, and acted as the secretary of the Supervisory Board and its committees. The Chairman of the Supervisory Board met regularly during the year with the CEO and other Managing Directors to discuss the performance of the company and projects as part of executing the strategy. The Supervisory Directors also interacted individually and collectively with Managing Directors outside the formal Supervisory Board meetings.
In 2020, there were no conflicts of interest between Adyen and Managing Directors or Supervisory Directors.
The Supervisory Board has established two Committees, as further explained in the chapter ‘Governance’: The Nomination and Remuneration Committee and the Audit Committee. The main considerations and conclusions of each Committee were shared with the full Supervisory Board.
The duties and composition of the Nomination and Remuneration Committee are described in the section ‘Governance’ of this Annual Report.
The Nomination and Remuneration Committee convened twice in 2020. All Committee members attended all meetings. The Committee has reviewed the composition of the Supervisory Board and Management Board. The Committee monitored and analyzed developments of the Code and applicable laws and regulations in relation to remuneration policies, reviewed Adyen’s Remuneration Policy and its execution for compliance with the Code and the Dutch Act on Remuneration Policies Financial Undertakings (Wet beloningsbeleid financiële ondernemingen) as implemented in the Dutch Financial Supervision Act (Wet op het financieel toezicht). For more information on the Remuneration Policy, please refer to the section ‘Remuneration Report’ of this Annual Report.
The Nomination and Remuneration Committee leads the evaluation of the performance of the individual Managing Directors and Supervisory Directors. During the evaluation the Committee took note of the Managing Directors’ views on their own remuneration. The Committee drafted proposals to the Supervisory Board for the remuneration of the individual Managing Directors and Supervisory Directors. The Nomination and Remuneration Committee has drawn up a plan for the succession of the Managing Directors and the Supervisory Directors.
In 2020, the remuneration policy for the Management Board and Supervisory Board was reviewed to ensure compliance with the EU’s revised Shareholders Rights Directive (SRD2) following its implementation in Dutch law on December 1, 2019. No substantive changes were included in the revised remuneration policy — the changes included adding an explanation to the level of support in society and the external environment the Company operates in, internal remuneration ratios and the wages and employment conditions of the employees of the Company. The revised remuneration policy considers the relevant statutory provisions and competitive market practices. The remuneration policy was adopted by the Annual General Meeting of Shareholders on May 26, 2020.
The duties and composition of the Audit Committee are described in the section ‘Governance’ of this Annual Report.
In 2020, the Audit Committee convened for four regular meetings. The Committee discussed the quarterly results and the financial statements. Furthermore, the Committee discussed reports from internal and external auditors, reviewed the Annual Report, the H1 and H2 Shareholder Letter including the relevant press releases and the Q1 2020 and Q3 2020 Trading Updates, and discussed the overall internal control environment. The Committee also discussed other topics including the accounting adjustment as published in the Q3 2020 Trading Update, compliance, governance, ICLAAP, SREP, tax, information security, legal, risk, merchants’ potential liability, and treasury. The members of the Committee met with the internal and external auditors outside the Committee meetings to ensure all relevant information was discussed. The Committee evaluated the performance and remuneration of the external auditor. All Committee members, the internal auditor and the external auditor attended all meetings held in 2020.
The Supervisory Board values and promotes diversity, both within the Supervisory Board and the Management Board, as within Adyen in general. Differences in amongst others educational background, nationality, age, race, gender, experiences and beliefs are vital to the business, enabling the Boards and the Company to look at issues and opportunities differently and to respond to challenges in new ways. Diversity is a key driver for innovation and allows Adyen to attract and retain the most talented and smart people. This standpoint has also been embedded in the Adyen Inclusion Policy — please refer to the ‘People and culture’ section of this Annual Report.
The Supervisory Board aims for a balance in its composition with respect to gender, nationality, age, experience and affinity with the nature and culture of the business of Adyen in all countries where it is active. In line with the Company’s Inclusion Policy and the adoption of the legislative proposal introducing stricter gender diversity measures for Dutch listed (in line with the SER’s guideline on Supervisory Board composition), Caoimhe Keogan has been appointed as Supervisory Director in the Extraordinary General Meeting which was held on February 12, 2021. The Supervisory Board now consists of 40% women.
Throughout the year, three Supervisory Directors – Piero Overmars (Chairman), Delfin Rueda, and Pamela Joseph – were independent from the Company within the meaning of Best Practice Provision 2.1.7, 2.1.8 and 2.1.9 of the Code. One Supervisory Board Director, Joep van Beurden, has acted as an advisor to the Company in the years preceding his appointment in 2017, and is therefore considered not to be independent within the meaning of Best Practice Provision 2.1.8 (iii) of the Code. The Supervisory Board is, as a body, independent as defined in the Code.
In 2020, the Supervisory Board has assessed its performance and composition and that of its committees. This assessment was facilitated by Focus Orange, an external advisory firm, and focused on organizational learning. In preparation, Focus Orange conducted interviews with each member of the Supervisory Board, the CEO, the CFO and the CLCO, as well as the Company Secretary. Focus Orange included the (anonymized) individual observations with regards to the functioning of the Supervisory Board and its relationship with the Management Board in its evaluation report. The outcomes of the assessment have been discussed with the Supervisory Board and the Management Board. The evaluation concludes, among others, that the relationship between the Supervisory Board and the Management Board can be described as transparent and cooperative, and the mix between formal and informal Supervisory Board relations and interactions is balanced and as such has proven to be instrumental to effective functioning of the Supervisory Board. The functioning of the Supervisory Board fully complies with the relevant principles and best practices as set out in the Dutch Corporate Governance Code. Following the positive assessment of the Supervisory Board and as part of continuous improvement, points for follow up are proposed, and include:
The Financial Statements for the year ended December 31, 2020, were prepared by the Management Board and approved by the Supervisory Board. The Report of the Independent Auditor, PricewaterhouseCoopers Accountants N.V. (PwC) is included in the Independent Auditor’s Report in the ‘Other Information’ section of the Financial Statements. The Supervisory Board recommends that the General Meeting adopts these Financial Statements.
Looking back at 2020, the Supervisory Board would like to thank all Adyen employees for their contribution during a challenging year in many aspects. The Supervisory Board is proud to see the team was able to shift towards a working-from-home environment — proving highly flexible during the global pandemic, while continuing to serve the interests of merchants, shareholders and other stakeholders of Adyen.
Unsponsored ADRs: As of October 10, 2008, the US Securities and Exchange Commission (SEC) published revisions to Exchange Act Rule 12g3-2(b) which permits depository institutions to establish unsponsored ADR programs without the participation of a non-US issuer. Adyen NV does not consent to the establishment of any unsponsored ADR program, and further does not authorize, endorse, support or encourage the creation of any such unsponsored ADR program in respect of its securities. Adyen NV will not actively, directly or indirectly participate in the creation of any unsponsored ADR program. Adyen NV specifically disclaims any liability whatsoever arising out of or in connection with any unsponsored ADR program. Adyen NV does not represent to any depository institution or any other person, nor should any depository institution or any person rely on a belief that the website of Adyen NV includes all published information in English or that Adyen NV otherwise satisfies the exemption criteria set forth in Exchange Act Rule 12g3-2(b).