The following section provides insight in how our remuneration policy was implemented in 2020 for both our Board of Management and Supervisory Board. The presented figures are at market value, unless stated otherwise. For IFRS based figures on the remuneration, see note 5.1 of the 'Consolidated financial statements'.
In conformity with the Code, scenario analyses have been performed regarding the possible results of the variable remuneration elements and the impact thereof on the remuneration of the Board of Management members. On the basis of these analyses, which include a minimum scenario (0%) and a maximum scenario (100%), respecting contractual agreements, the Supervisory Board deems the remuneration levels to be appropriate. Hence, no further measures are required in this regard.
In 2020, we have overseen that all decisions made on Board of Management and Supervisory Board remuneration are in line with the remuneration policies as approved by the AGM in 2013 (regarding the running long-term incentive plans) and 2020.
No deviations took place from the decision-making process for the implementation of the remuneration policies.
No temporary deviations took place from the remuneration policies.
No remuneration has been granted and allocated by subsidiaries or other companies whose financials are consolidated by PostNL N.V. since all members of the Board of Management and the Supervisory Board are paid directly by PostNL N.V.
No severance payments were granted to members of the Board of Management or the Supervisory Board.
No variable remuneration has been clawed-back.
In line with our remuneration policy as adopted by the AGM in 2020, we benchmark our remuneration against a reassessed peer group at least every four years. The 2020 peer group, as defined in our remuneration policy, has not been altered since.
Furthermore, we take the internal perspective into account in the implementation of the remuneration policy in order to ensure internal alignment with the remuneration of our employees. In 2020, we monitored the development of our internal pay ratios. The ratio between the annual total remuneration for the CEO and the average annual total remuneration of an employee was 23.8 for 2020. The ratio between the annual total remuneration of the CFO and the average annual total remuneration of an employee was 17.9 for 2020 . The Supervisory Board is committed to the guiding principles as laid down in the remuneration policy and deems the alignment with the broader workforce important, as demonstrated by the consistent development of the internal pay ratios over the years. In table 'Performance/remuneration/internal pay ratio', we provide more detailed information on the calculation method and the development of the Board of Management remuneration versus the wider workforce.
The base salaries for both members of the Board of Management were indexed in 2020 compared to 2019 in line with the remuneration policy.
The total remuneration of the Board of Management in 2020 (and 2019) is outlined in the following table:
Name of Director - position | Reported Year | Fixed remuneration | Variable remuneration | Total remuneration | Fixed-variable remuneration | |||
|---|---|---|---|---|---|---|---|---|
Base salary1 | Other benefits2 | Pension costs3 | One year variable | Multi-year variable | ||||
Herna Verhagen - CEO | 2020 | 640,625 | 181,760 | 41,675 | 216,211 | 60,065 | 1,140,336 | 76%-24% |
2019 | 625,000 | 185,135 | 46,614 | 140,625 | 107,742 | 1,105,116 | 78%-22% | |
Pim Berendsen - CFO | 2020 | 486,875 | 114,341 | 32,918 | 164,320 | 27,287 | 825,741 | 77%-23% |
2019 | 475,000 | 115,002 | 44,566 | 106,875 | 47,293 | 788,736 | 80%-20% | |
Name of Director - position | Performance measure | Link to strategic objective | Relative weight of performance measure | Minimum threshold of performance measure | Actual performance | Actual remuneration (% of base salary) |
|---|---|---|---|---|---|---|
Herna Verhagen - CEO | Profitability | Deliver profitable growth and generate sustainable cash flow | 30% | €124m | €245m | 11.25% |
Cash generation | 30% | €(296)m | €186m | 11.25% | ||
Total Financial performance measures | 22.50% | |||||
Employee engagement | Attract and retain motivated people | 10% | 76.0% | 83.6% | 3.75% | |
Customer satisfaction | Help customers grow their business | 10% | 29.0% | 37.0% | 3.75% | |
Quality Mail | Secure a sustainable mail business | 10% | 95.0% | 94.3% | 0% | |
Quality Parcels | Help customers grow their business | 10% | 98.0% | 98.6% | 3.75% | |
Total Non-financial performance measures | 11.25% | |||||
Total | 33.75% | |||||
STI payout for the Board of Management is based on actual performance (against the 2020 targets on each of the performance measures) as assessed by the Remuneration Committee and summarised in the table above.
More detailed information regarding the STI performance is included in the message from the Committee chairman.
The LTI 2020 was granted in 2018 and as such, originates from the previous remuneration policy as adopted by the AGM in 2013.
The Remuneration Committee assessed the achievements of the Board of Management over the three-year performance period. Targets on each performance measure versus actual performance are summarised in the table below.
More detailed information regarding the LTI performance is included in the message from the Committee chairman.
Name of Director - position | Performance measure | Link to strategic objective | Relative weight of performance measure | Minimum threshold of performance measure | Maximum threshold of performance measure | Actual performance | Actual remuneration (% of base salary) |
|---|---|---|---|---|---|---|---|
Herna Verhagen - CEO | Underlying net cash income | Deliver profitable growth and generate sustainable cash flow | 33.33% | €374m | €454m | €440m | 11.875% |
Cost savings | 33.33% | €174m | €230m | €124m | 0% | ||
New growth initiatives | Help customers grow their business | 33.33% | Reasonable | Very Good | Very Good | 12.500% | |
Total | 24.375% |
The applicable number of performance shares will vest in 2021 and are subject to a two year holding period. This holding period aligns the long-term interest of the members of the Board of Management and our shareholders (see also the section ‘Share ownership’ in this regard).
The market value of shares granted, vested and those shares subject to a holding period are presented in the table below.
The market value of the shares is determined by multiplying the number of shares by the five-day volume weighted average share price of PostNL prior to 1 January 2021 at €2.8537 (2019: €2.0208). For the number of shares we refer to note 5.1 in the 'Financial Statements' chapter.
Name of Director - position | Specification of plan | Value of shares held at 1 Jan 20201 | Value of shares granted during 20202 | Value of shares settled during 2020 | Value of shares forfeited during 2020 | Value of net shares under a holding period at 31 Dec 2020 | Value of shares subject to a performance condition at 31 Dec 2020 |
|---|---|---|---|---|---|---|---|
Herna Verhagen - CEO | PSP 2020 | 461,968 | 461,968 | ||||
PSP 2019 | 301,742 | 301,742 | |||||
PSP 2018 | 244,539 | 244,539 | |||||
PSP 2017 | 180,211 | (60,065) | (120,146) | 30,332 | |||
PSP 2016 | 73,411 | 73,411 | |||||
PSP 2015 | 78,257 | ||||||
Total | 878,161 | 461,968 | (60,065) | (120,146) | 103,743 | 1,008,249 | |
Pim Berendsen - CFO | PSP 2020 | 351,096 | 351,096 | ||||
PSP 2019 | 229,326 | 229,326 | |||||
PSP 2018 | 185,850 | 185,850 | |||||
PSP 2017 | 81,867 | (27,287) | (54,580) | 3 | |||
Total | 497,043 | 351,096 | (27,287) | (54,580) | 766,273 | ||
Total market value | 1,375,204 | 813,065 | (87,352) | (174,726) | 103,743 | 1,774,522 |
Board of Management | 31 Dec 2019 | 31 Dec 2020 | |
|---|---|---|---|
Herna Verhagen - CEO | Conditional shares | 254,579 | 353,313 |
Unconditional shares under a holding period | 82,578 | 36,354 | |
Unconditional shares not subject to a holding period | 190,987 | 247,840 | |
528,144 | 637,507 | ||
Pim Berendsen - CFO | Conditional shares | 174,175 | 268,519 |
Unconditional shares under a holding period | |||
Unconditional shares not subject to a holding period | 46,142 | 50,970 | |
220,317 | 319,489 |
The conditional shares, unconditional shares under a holding period and unconditional shares not subject to a holding period are presented in the table above.
All members of the Board of Management are required to hold a specified value of PostNL shares. This minimum shareholding requirement fosters the identification of the Board of Management members with PostNL’s strategy and its shareholders and aims to ensure a sustainable link to the performance of the company. The minimum shareholding requirement for the CEO and CFO is equivalent to 75% of annual base salary. These minimum shareholdings can be built up over 7 years, starting as from 2020 for the current Board of Management members.
The table below provides an overview of the shares held at year end 2020 by the CEO and CFO as percentage of their annual base salary.
Board of Management | 31 Dec 2020 | ||
|---|---|---|---|
Herna Verhagen - CEO | 122 | ||
Pim Berendsen - CFO | 29 |
The CEO exceeds the minimum share ownership level, and the CFO has not reached the minimum level yet, whilst expecting to do so within the requisite period.
The table below provides an overview on the change of remuneration, company performance, average remuneration per FTE and internal pay ratios over the last 5 financial years (IFRS based).
In line with the Code, the remuneration of the Supervisory Board is not related to the company performance and paid in cash only. Therefore, the Supervisory Board is excluded from this table. For an overview of the total remuneration of the Supervisory Board over the last five years, we refer to table 'Five year overview total remuneration Supervisory Board'.
The ratios between the annual total remuneration for the CEO and CFO and the average annual total remuneration for an employee was 23.8 for the CEO in 2020 and 17.9 for the CFO in 2020. The average remuneration per FTE in 2019 decreased due to the acquisition of Sandd. The table below shows the ratio development over the last 5 years.
2016 | 2017 | 2018 | 2019 | 2020 | ||
|---|---|---|---|---|---|---|
Profitability1 | in € million | Not Reported | Not Reported | 206 | 135 | 245 |
Delta in % | (34%) | 81% | ||||
Earnings attributable to shareholders2 | in € million | Not Reported | Not Reported | 182 | 83 | 197 |
Delta in % | (54%) | 137% | ||||
Revenue PostNL | in € million | 2,723 | 2,725 | 2,772 | 2,844 | 3,255 |
Delta in % | 0% | 2% | 3% | 14% | ||
Total remuneration CEO | in € | 1,406,648 | 1,127,609 | 1,204,669 | 1,095,078 | 1,236,376 |
Delta in % | (20%) | 7% | (9%) | 13% | ||
Total remuneration CFO | in € | 1,020,880 | 822,655 | 1,020,5813 | 831,273 | 926,719 |
Delta in % | (19%) | 24% | (19%) | 11% | ||
Average remuneration per FTE4 | in € | 46,292 | 45,939 | 48,998 | 44,108 | 51,861 |
Delta in % | (1%) | 7% | (10%) | 18% | ||
Internal pay ratio | ||||||
CEO5 | 30.4 | 24.5 | 24.6 | 24.8 | 23.8 | |
CFO3 | 22.1 | 17.9 | 20.8 | 18.8 | 17.9 |
The total remuneration of the Supervisory Board in 2020 (per individual member) and 2019 (as a total) is presented in the table below:
Supervisory Board member | Board fee | Committee fees | Total fees | ||
|---|---|---|---|---|---|
Nomination | Remuneration | Audit | |||
Jan Nooitgedagt | 55,000 | 7,500 | 5,000 | 67,500 | |
Eelco Blok | 40,000 | 5,000 | 5,625 | 50,625 | |
Agnes Jongerius | 40,000 | 1,444 | 5,000 | 46,444 | |
Marike van Lier Lels | 40,000 | 3,556 | 7,500 | 51,056 | |
Thessa Menssen | 40,000 | 5,000 | 10,000 | 55,000 | |
Ad Melkert1 | 28,444 | 5,333 | 5,333 | 39,110 | |
Jeroen Hoencamp2 | 28,444 | 3,556 | 4,090 | 36,090 | |
Total current members | 271,888 | 21,056 | 20,333 | 32,548 | 345,825 |
Jacques Wallage3 | 11,556 | 1,444 | 2,167 | 1,875 | 17,042 |
Frank Rövekamp4 | 11,556 | 1,444 | 13,000 | ||
Total 2020 | 295,000 | 23,944 | 22,500 | 34,423 | 375,867 |
Total 2019 | 313,242 | 32,000 | 28,000 | 30,500 | 403,742 |
In line with the remuneration policy as adopted by the AGM in 2020, the Supervisory Board members are entitled to a Board fee and one or more fixed Committee fee(s). The members of the Supervisory Board receive no compensation related to performance and accrue no pension rights with the company.
As such, their total remuneration is 100% fixed. The members of the Supervisory Board receive no severance payments in the event of termination. PostNL does not grant loans, including mortgage loans, advance payments, guarantees and options or shares to any member of the Supervisory Board.
A five year overview of the total remuneration of the Supervisory Board is presented in the following table.
Supervisory Board member | 2016 | 2017 | 2018 | 2019 | 2020 |
|---|---|---|---|---|---|
Jan Nooitgedagt | 43,736 | 68,500 | 67,500 | ||
Eelco Blok | 23,000 | 49,000 | 53,000 | 55,000 | 50,625 |
Agnes Jongerius | 51,500 | 51,500 | 45,500 | 46,000 | 46,444 |
Marike van Lier Lels | 34,242 | 51,056 | |||
Thessa Menssen | 56,500 | 58,500 | 49,500 | 58,500 | 55,000 |
Ad Melkert | 39,110 | ||||
Jeroen Hoencamp | 36,090 | ||||
Total current members | 131,000 | 159,000 | 191,736 | 262,242 | 345,825 |
Marc Engel | 52,000 | 51,000 | 54,000 | 40,500 | |
Michiel Boersma | 60,625 | 16,042 | |||
Piet Klaver | 19,042 | ||||
Jacques Wallage | 47,500 | 66,750 | 57,547 | 55,000 | 17,042 |
Frank Rövekamp | 51,500 | 52,000 | 44,500 | 46,000 | 13,000 |
Total former members | 230,667 | 185,792 | 156,047 | 141,500 | 30,042 |
Total remuneration | 361,667 | 344,792 | 347,783 | 403,742 | 375,867 |
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