The Supervisory Board is responsible for the remuneration policy of the Board of Management and its implementation. The Remuneration Committee oversees and continues to ensure the implementation of the remuneration policies as approved by the shareholders at the AGM and continues to ensure that decision making is in line with those policies, PostNL's performance and strategic priorities.
The Remuneration Committee consists of:
Chairman: Ad Melkert
Member: Nienke Meijer (as per 20 April 2021)
Member: Koos Timmermans (as per 20 April 2021)
Member: Jan Nooitgedagt(stepped down as per 20 April 2021)
Member: Eelco Blok (stepped down as per 20 April 2021)
Member: Agnes Jongerius (stepped down as per 20 April 2021)
The main responsibilities of the Remuneration Committee are:
Make a proposal for a clear and understandable remuneration policy for the Board of Management and the Supervisory Board.
Make a proposal for the remuneration of the individual members of the Board of Management.
Prepare the remuneration report.
Make a proposal for targets on performance measures included in the remuneration policy and measure achievements against those targets for variable remuneration components.
Make a proposal for the grant of (conditional) company shares.
Dear reader,
On behalf of the Supervisory Board, I am pleased to present our 2021 remuneration report. This report includes an overview of the implementation of the remuneration policies in 2021, as well as a preview of the proposed Board of Management remuneration policy revision. Since a final set of EU guidelines on the standardised presentation of the remuneration report is not yet available, the 2021 remuneration report has been drafted again in the spirit of the draft guidelines, in line with the 2019 and 2020 remuneration reports. We intend to update our report where necessary once the final EU guidelines have been published.
The 2021 remuneration report will be subject to an advisory vote at our AGM on 19 April 2022. During last year’s AGM, 98.08% of the shareholders voted for the 2020 remuneration report. In preparation for the 2021 report, we consulted (representing bodies of) several external stakeholders. Their feedback has been taken into account, but did not lead to any material changes to the remuneration report.
In the year 2021 the Covid-19 pandemic still played a dominant role in our lives. In dealing with the pandemic and safeguarding business continuity, PostNL could rely on the experiences of last year. As from the start of the pandemic, ensuring a safe and healthy environment for the people working for and with PostNL always remained key priority. At the same time, the growth in e-commerce and the transition in mail continued. We continued to successfully deliver on our strategy, including our commitment to sustainability and digital transformation. Highlights of 2021 included the completion of the sale of Nexive to Poste Italiane in the beginning of the year, the new social plan that was concluded with the trade unions and the opening of our fully automated, robotic sorting centre for small parcels, an example of innovation and integrated value creation.
For 2021 PostNL reported very good financial results, driven by a solid business performance at Parcels and a strong result at Mail in the Netherlands. With a profitability of €308 million and free cash flow amounting to €288 million, PostNL considerably outperformed previous guidance and target levels, resulting in further improvement of the company’s financial position. Cumulative underlying net cash income 2019-2021 of €584 million exceeded the maximum threshold, while cumulative cost savings of €102 million in 2019-2021 were lower than anticipated.
As motivated people are key to deliver the customer experience PostNL aims for, we are very satisfied that employee engagement remained high in 2021 and exceeded target level. Although the share of engaged employees decreased in October 2021 compared to April 2021, in the long run the share of engaged employees still shows an upward trend.
Providing customer value is a key driver in the execution of PostNL’s strategy. And although we believe that during 2021 we remained demonstrating the many ways this is achieved, customer satisfaction, measured by the share of highly satisfied customers, decreased from 37% in 2020 to 34% in 2021. Amongst the factors that appear to have caused this decline are high volumes in lock-down periods, staffing issues and the import duties on non-EU deliveries. We are however pleased that the share of satisfied customers remained unchanged in 2021.
At Mail in The Netherlands, 94% of consumer mail was delivered by the next delivery day, which is below (regulatory) target of 95%. Our performance in 2021 was impacted in several ways, including extreme weather conditions and ongoing Covid-19 restrictions which caused higher absenteeism, operational delays and limited process capacity. As performance on quality is key to secure a sustainable and solid mail business, quality improvement has our attention going forward. Delivery quality at Parcels with 98% remained high throughout 2021.
In 2021 PostNL continued to demonstrate the strength of our core business under challenging and changing conditions. We are very pleased that, while our operations ensured that customers could continue and grow their business under fast and frequently changing circumstances, numerous initiatives were launched and continued throughout the company to create business and speed up growth with customers, especially in logistics, health and digitalisation.
In the beginning of 2021 it was decided to index the base salary of the Board of Management for the second time since 2013, in line with the framework as defined in the remuneration policy. Furthermore in 2021, necessary steps were taken towards the revision of the current remuneration policy of the Board of Management, including a (digital) roadshow that was held with shareholders and other relevant stakeholders including investor and employee representatives. The purpose of the policy revision is to adjust part of the financial LTI performance measures and their weighting, which is explained in more detail in the final part of this remuneration report.
Because PostNL believes that sustainability is our license to operate, our commitment to sustainability will take a more prominent role in 2022 by accelerating our sustainability investments and speeding up progress towards our environmental, social and governance targets. Since 2020, the remuneration policy of the Board of Management includes climate impact as performance measure under the long-term incentive plan, to strengthen alignment with our sustainability goals. Next year, the climate impact target will be evaluated for the first time. Performance will be included in the 2022 remuneration report.
In the period ahead, the Remuneration Committee will be closely monitoring developments on corporate governance, including the envisaged update of the Dutch Corporate Governance Code and the impact hereof on the remuneration policies of the Board of Management and Supervisory Board.
The new 2022 remuneration policy of the Board of Management will be put forward for a binding shareholder vote at the AGM on 19 April 2022. Upon shareholders’ approval, the new policy will take effect from 1 January 2022. The long term incentive for 2022-2024 will be based on the principles as laid down in the new 2022 remuneration policy.
The Hague, the Netherlands, 28 February 2022
On behalf of the Remuneration Committee,
Ad Melkert, Chairman
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