Summary of the remuneration policy
The remuneration policy must be such that it enables the recruitment and retention of qualified managers on market terms. The remuneration policy reflects Gamma Holding’s culture and strategy through the choice of remuneration levels and the proportionality of remuneration and through the selection of short-term and long-term performance criteria.
The policy is also aimed at preventing Executive Board members from acting in their own interests at the expense of the interests of the company and its shareholders and is designed to avoid challenging Executive Board members to take risks that are inappropriate in terms of the existing strategy. To this end, the variable component of the remuneration is restrained in relation to the fixed income. When fixing the total remuneration, proportionality of remuneration within the company is taken into consideration. In order to ensure that the employment conditions are on market terms, Board-level positions are weighted using the same method (Hay job evaluation system) as is used for the entire management, enabling consistent market comparison of salary levels. This uniform method contributes significantly to the establishment and monitoring of proportionate remuneration within the company.
Procedure for fixing remuneration
The remuneration policy for the Executive Board of Gamma Holding is adopted by the General Meeting of Shareholders on a proposal from the Supervisory Board. The Supervisory Board fixes the remuneration of the individual Executive Board members on a proposal from the Remuneration Committee, subject to the terms of the remuneration policy.
Before drafting the proposed remuneration policy and fixing the remuneration of the individual Executive Board members, the Supervisory Board analyses the possible outcomes for the variable components of remuneration, their consequences for the remuneration of the Executive Board members and the relative remuneration within the company.
In the remuneration report the Supervisory Board reports on the practical implementation of the remuneration policy in the preceding financial year and its expectations for the remuneration policy in the coming financial year and in subsequent years. The report provides insight into the relationship between the extent to which Gamma Holding’s objectives have been achieved and the remuneration of the members of the Executive Board.
Remuneration package
In order to safeguard the short and long-term interests of the company as effectively as possible, the remuneration package for the members of the Executive Board at Gamma Holding is made up of four components, i.e. the fixed salary, variable remuneration on short-term results, variable remuneration on long-term results (share plan) and secondary employment conditions, including a pension plan.
The short-term variable component amounts to a maximum of 60% of the fixed gross annual salary (over the year of performance). The long-term variable component consists of conditionally granted shares representing a value of at most 50% of the fixed gross annual salary (over the year of performance). On the date on which the shares vest unconditionally - three years after the grant - they may represent a value of at most 75% of the fixed gross annual salary at that moment.
With this distribution, the Supervisory Board strives for a healthy balance between a short-term and a long-term focus in the variable income, with – given the maximum pay-out on both elements – the long term being predominant. The Supervisory Board considers the total level of the variable components to be appropriate to the role, company profile and risk profile.
Fixed salaryThe fixed salary of members of the Executive Board is related to the salary levels of board members in positions of equivalent seniority in the Netherlands (which is established by surveying a broad reference market of listed companies with international operations of a similar size, with a similar turnover and whose head offices are in the Netherlands), and also taking into account the proportionality of remuneration within the company. The level of the fixed salary is assessed annually against the market level and adjusted where necessary. Salary adjustments are fixed in December each year and take effect on 1 January of the following year.
Variable remuneration – short term
The variable remuneration for a member of the Executive Board shall amount to a maximum of 60% of the fixed gross annual salary applicable for the year for which the variable salary is being set. Every year the Supervisory Board adopts the performance criteria and targets in advance and compiles a table showing the relationship between the level of performance and level of payment. The variable component of the remuneration is determined for 75% by financial performance criteria and for 25% by personal performance criteria that are set each year.
The degree to which the financial targets have been achieved, is determined on the basis of the company’s financial statements drawn up by the Executive Board and examined by the auditor, as submitted for adoption by the General Meeting of Shareholders. The degree to which the personal performance criteria have been achieved is determined at the discretion of the Supervisory Board. In special circumstances, the Supervisory Board can, at its discretion, set the variable remuneration higher or lower than would follow from the application of the criteria and targets set beforehand.
For the financial criteria, key figures are adopted that are the most relevant for assessing the company’s performance in relation to its strategic objectives. The personal criteria relate to the contribution to the continuity of the company. The variable remuneration is paid after the General Meeting of Shareholders has adopted the annual financial statements for the relevant year.
Share plan (Variable remuneration – long term)
As a long-term component of the variable remuneration, every year Gamma Holding awards ordinary shares to the members of the Executive Board subject to conditions relating to their performance. The number of shares to be granted on a conditional basis is equal to 50% of the fixed gross annual salary divided by the current closing price of the share on the date of granting. The shares are granted immediately after the annual General Meeting of Shareholders at which the financial statements are adopted.
A conditional grant vests unconditionally after a period of three years, if and insofar as the performance criteria set beforehand have been met. The performance criteria are established by the Supervisory Board prior to the shares being granted and are set out in the remuneration report.
On the date on which these shares vest unconditionally their value must not exceed 75% of the individual’s fixed gross annual salary at the time. If it does, the number of shares vesting unconditionally will be reduced accordingly. This provision is designed to prevent members of the Executive Board taking risks that are inconsistent with the company’s adopted strategy in order to boost the value of the share.
Unless the Supervisory Board decides otherwise in individual cases, all shares granted on a conditional basis lapse if the contract of employment with the member of the Executive Board is terminated prior to the date on which these shares were to vest unconditionally.
Shares that are acquired must be held for at least five years, including the conditional period, or at least until the end of the contract of employment, if this period is shorter, with the exception of the component that has to be disposed of to pay the taxes due on their acquisition.
‘Claw Back’
The company is authorised to claw back all or part of the variable remuneration insofar as it was paid on the basis of incorrect information about the achievement of the targets underlying the variable remuneration or about the conditions on which the variable remuneration depended.
Pension plan
The retirement age for members of the Executive Board has been determined in accordance with the current pension plan, with 65 years as the recommended age of retirement. It is an index-linked, contributory average-pay plan. The member’s contribution to the pension plan currently amounts to 8% of the pensionable salary derived from the fixed annual income.
Period of appointment and contracts of employment of members of the Executive Board
Mr Van Reeuwijk was appointed on 23 April 2009 for four years (extended until the first General Meeting of Shareholders after this period). This is in accordance with the Code. Mr Van Reeuwijk has a contract of employment with Gamma Holding of unlimited duration; that was the case before his appointment as a member of the Executive Board.
Mr Albers was appointed on 29 July 2009 for a period of three years (extended until the first General Meeting of Shareholders after this period). This is in accordance with the Code. Mr Albers has a contract of employment with Gamma Holding of limited duration, which is equal to the duration of his term of office.
The period of notice to be observed by Gamma Holding and both members of the Executive Board in the event of premature termination of the contract of employment is four months if the contract of employment is terminated by Gamma Holding and two months if the contract of employment is terminated by the respective member of the Executive Board.
The company does not provide personal loans to the members of its Executive Board.
Newly appointed members of the Executive Board shall, in principle, be subject to a similar arrangement, except in special circumstances.
Compensation for dismissal
The contracts of employment with Messrs Albers and Van Reeuwijk include agreed compensation in the event of (premature) dismissal of a maximum of one time the annual salary, comprising the fixed salary. When calculating the above-mentioned compensation, this is also understood to include a situation whereby, due to a change in the control of Gamma Holding, as a result of which the current Executive Board no longer has actual control to determine policy under the supervision of the Supervisory Board, one of the parties terminates the contract of employment.
When issuing new contracts of employment, Gamma Holding shall decide in each individual case, according to the circumstances, whether a severance payment is to be agreed upon and how much this shall amount to. In so doing, the company shall comply with the standards set out in the Code.
The full remuneration report can be downloaded in pdf-format (in Dutch only).
