Policy Framework

The following section provides a high-level overview of the remuneration policy of the Board of Management as adopted by the 2022 AGM and the remuneration policy of the Supervisory Board as adopted by the 2020 AGM, both applicable in 2023.

Board of Management

The purpose of PostNL is to deliver special moments and our ambition is to be the favourite deliverer. Our strategy is to become the leading logistics and postal service provider in, to and from the Benelux. This translates into strategic objectives that can be found in the chapter Our strategy, which are incorporated in the remuneration policy.

Content element	Description
Guiding principles	The objective of the policy is to attract, reward and retain qualified Board of Management members to set and implement our purpose, ambition, strategy, objectives and culture. The policy is built on the following principles: Alignment Transparent Compliant Simple Sustainable
External and internal perspective	The Supervisory Board applies a holistic view towards remuneration whereby both internal and external perspectives are taken into account: Market perspective is one of the factors that the Supervisory Board takes into account when determining adequate remuneration levels to attract and retain qualified leaders. The Supervisory Board reviews a peer group to ensure a balanced representation of the relevant labour market. The main criteria applied to determine the peer group are Dutch listing and comparability to PostNL in terms of size (revenue, employees, market capitalisation, assets), board structure and geographical focus. PostNL will benchmark its remuneration against a reassessed peer group at least every four years. We refer to our website for the 2020 peer group. The remuneration for the Executive Committee, other senior management and employees who fall under a collective labour agreement (CLA), is intended to be aligned with the principles underlying the policy for the Board of Management. This is to establish internal consistency within salary structure, design of incentive plans and guidelines for salary increases. In this regard, the Supervisory Board continuously monitors the development of pay ratios.
Base salary	Purpose and link to strategy: Provides a fixed level of earnings to attract and retain the Board of Management to execute PostNL’s strategy.
	Operation: The Supervisory Board sets base salaries in line with the opportunity and takes multiple factors into account, such as environment and societal context in which PostNL operates, the nature and responsibility of the role, individual and business performance, the pay conditions of PostNL’s broader employee population and market positioning. A possible regular annual increase is capped at the salary increase of the broader PostNL workforce, as agreed upon in the PostNL CLA.
	Opportunity: Base salary levels are set at around the median market level of the peer group.

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Content element	Description
Short-term incentive	Purpose and link to strategy: Rewards the delivery of short-term performance and takes into account the interests of multiple stakeholders. Performance framework and operation: The Supervisory Board sets challenging and realistic targets for each performance measure. Performance period: one year. At the end of the performance period, the Supervisory Board determines which targets on each of the performance measures have been achieved. A performance measure can only contribute to pay-out if it is fully met, which means there is no stretch and no threshold. The STI is paid on an annual basis in cash. The quantifiable performance measures are defined, weighted and linked to the strategy as shown below:
	Performance measure	Definition	Weight	Link to strategic objectives
	Profitability	Earnings before interest and taxes adjusted for the impact of project costs and incidentals (normalised EBIT)	30%	Generate sustainable growth and cash flow
	Cash generation	Cash flow available for dividend payments to shareholders, acquisition of group companies and bond repayments (free cash flow)	30%	Generate sustainable growth and cash flow
	Total financial performance measures		60%
	Employee engagement	The share of engaged employees	10%	Our people take pride in the work we do
	Customer satisfaction	The share of customers who are at least very satisfied	10%	Accelerate our customers' success
	Quality Mail	Mail sent by consumers and delivered the next day to all Dutch households	10%	Secure a sustainable mail business
Short-term incentive	Quality Parcels	The share of parcels with an on-time, first-time delivery attempt	10%	Consumers can count on us
	Total non-financial performance measures		40%
	Opportunity: Set with a reference to the 25th percentile of the peer group. The maximum value is set at 37.5% of annual base salary for all Board of Management members.

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Content element	Description
Long-term incentive	Purpose and link to strategy: Rewards long-term value creation to PostNL’s strategy and reinforces alignment with shareholder interests by granting share. Performance framework and operation: The Supervisory Board sets challenging and realistic target levels for each performance measure. Performance period: three years. Ordinary PostNL shares will be conditionally granted. At the end of the performance period, the Supervisory Board determines the extent to which targets on each of the performance measures have been achieved and consequently to which extent the conditional shares and their dividend equivalent will vest. There is no vesting below threshold. Upon vesting, performance shares and their conditional dividend equivalent are subject to a holding period of two years. Therefore, the performance shares are blocked for a total period of 5 years. The quantifiable performance measures are defined, weighted and linked to the strategy as shown on the next page:
Long-term incentive	Performance measure¹	Definition	Weight	Link to strategic objectives
	Earnings attributable to shareholders	Cumulative net earnings attributable to the shareholders, adjusted for the impact of project costs and incidentals (cumulative normalised comprehensive income)	33.33%	Generate sustainable growth and cash flow
	Cash generation	Cumulative cash flow available for dividend payments to shareholders, acquisition of group companies and bond repayments (free cash flow)	33.33%	Generate sustainable growth and cash flow
	Total Financial performance measures		66.67%
	Climate impact	CO₂ efficiency of our own operations	33.33%	Reduce our environmental impact
	Total non-financial performance measures		33.33%
	Opportunity: Set with a reference to the 25th percentile of the peer group. The maximum value is set at 37.5% of annual base salary for all Board of Management members.

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Content element	Description
Pension and benefits	Purpose and link to strategy: Remain competitive with the market. Operation: Board of Management members are entitled to benefits such as pension benefits, risk insurances, company car, tax and social security, a fixed expense allowance and possible service costs. Participation in the basic pension plan provided by the Dutch pension fund (Stichting Pensioenfonds PostNL) is mandatory under conditions that apply to the participating PostNL employees. For the pensionable salary that is not covered by the basic pension plan, a company paid pension allowance of 19% applies. This contribution can be used to participate in the so-called net pension plan. Dependents' pension and waiver of premium in the event of disability are insured on a risk basis as part of the net pension plan, the premium of which is paid by PostNL. Opportunity: Pension and benefits are in line with market practice and are aligned with the elements applicable to the wider workforce. We refer to the website of Stichting Pensioenfonds PostNL (https://www.pensioenpostnl.nl) for the latest applicable pension agreement.
Miscellaneous	Ultimate remedy, claw-back, share ownership guidelines, contractual, derogation and procedural provisions apply.

Content element

Description

Pension and benefits

Purpose and link to strategy:

Remain competitive with the market.

Operation:

Board of Management members are entitled to benefits such as pension benefits, risk insurances, company car, tax and social security, a fixed expense allowance and possible service costs.
Participation in the basic pension plan provided by the Dutch pension fund (Stichting Pensioenfonds PostNL) is mandatory under conditions that apply to the participating PostNL employees.
For the pensionable salary that is not covered by the basic pension plan, a company paid pension allowance of 19% applies. This contribution can be used to participate in the so-called net pension plan. Dependents' pension and waiver of premium in the event of disability are insured on a risk basis as part of the net pension plan, the premium of which is paid by PostNL.

Opportunity:

Pension and benefits are in line with market practice and are aligned with the elements applicable to the wider workforce. We refer to the website of Stichting Pensioenfonds PostNL (https://www.pensioenpostnl.nl) for the latest applicable pension agreement.

Miscellaneous

Ultimate remedy, claw-back, share ownership guidelines, contractual, derogation and procedural provisions apply.

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¹ In 2020 and 2021, two segment-based free cash flow performance measures were in place (each weighing 25%), next to earnings attributable to shareholders (25%) and climate impact (25%).

For more details regarding the remuneration policy of the Board of Management as adopted by the 2022 AGM, we refer to our website.

Supervisory Board

Content element	Description
Guiding principles	The objective of the policy is to attract and retain qualified talent to perform the Supervisory Board’s duties and act in accordance with the interests of PostNL and its stakeholders. The policy is built on the following principles: Alignment Independence Transparent Compliant Simple
Framework	The framework: Reflects time spent and the responsibilities of the role; Supports deployment of specific skills and competences; and Is fixed and cash-based with no variable or share-based element and therefore not related to company performance. The Remuneration Committee takes multiple factors into account when determining compensation levels, including the type of role, the pay conditions of PostNL’s employees and relevant market developments. Compensation levels will be benchmarked at least every four years against the same peer group that is used for the Board of Management benchmark. PostNL aims to position compensation between the lower quartile and median levels of the peer group for all compensation elements of the policy.
Free structure	The policy contains the following compensation elements: Board fees for chairman and members; Committee fees for chairman and members; Other benefits; Expenses. The fee structure is as follows:
	Annual Board fees (excl. VAT)
	Chairman	€55,000
	Member	€40,000
	Annual Committee fees (excl. VAT)
	Chairman Audit Committee	€10,000
	Chairman Remuneration / Nomination Committee	€7,500
	Member Audit Committee	€7,500
	Member Remuneration / Nomination Committee	€5,000
Miscellaneous	Contractual, derogation and procedural provisions apply.

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For more details regarding the remuneration policy of the Supervisory Board as adopted by the 2020 AGM, we refer to our website .

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