2024 Board of Management actual remuneration

The following section provides insight into how our remuneration policy was implemented in 2024 for the Board of Management. The presented figures are at market value, unless stated otherwise. For IFRS-based figures on the remuneration, see note '5.1 Remuneration of Supervisory Board, Board of Management and senior management' to the Consolidated financial statements for more information.

Implementation of the remuneration policies

In 2024, we have overseen that all decisions made regarding the remuneration of the Board of Management are in line with the new remuneration policy, as approved by the AGM in 2024, and decision-making process (no deviations took place). All remuneration is paid directly to the Board of Management by PostNL N.V. As such, no remuneration has been granted and/or allocated by subsidiaries or other companies whose financials are consolidated by PostNL N.V. Furthermore, PostNL did not grant any severance payments to the Board of Management. Lastly, the Supervisory Board did not claw back any variable remuneration from the Board of Management.

As described in the introduction of this remuneration report, as of 1 January a new remuneration policy for the Board of Management is in place which has been implemented in 2024, except for variable remuneration increases.

Scenario analysis

In conformity with the Corporate Governance Code (hereafter: 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. Based on these analyses, the Supervisory Board deems the remuneration levels to be appropriate in view of the performance. Hence, no further measures are required in this regard. The analyses, amongst others include a minimum performance scenario (0%), a maximum performance scenario (100%) and share price variations.

External perspective

In line with the remuneration policy, the remuneration of the Board of Management is benchmarked against a reassessed peer group at least every four years. The peer group, as defined in the remuneration policy, has been updated further to the recent evaluation of the remuneration policy. Interim adjustments in the composition of the peer group are permitted, but have not taken place so far.

Internal perspective

In 2024, we continued to monitor the development of the internal pay ratios which show a relatively consistent development over the years. In conformity with the Code, the ratio is calculated between the annual total remuneration for the CEO and the average annual total remuneration of an employee was 21.4 for 2024. The ratio between the annual total remuneration of the CFO and the average annual total remuneration of an employee was 16.0 for 2024. In the 'Performance/ remuneration/internal pay ratio' table, more detailed information is provided on the calculation method and the development of the Board of Management remuneration versus the wider workforce.

PostNL Remuneration Board of Management in €
2023, 2024

1. Base salaries 2024 were indexed with 4%.
2. Other benefits include company costs such as tax and social security, pension allowances, company car and other compensation.
3. Pension costs represent the cash out for the collective defined contribution plan (net of employee contributions), and risk premium for a net pension plan.
4. The 2024 amounts give the value of the shares that vested in May 2024 which relate to the LTI 2021-2023. The 2023 amounts give the value of the shares that vested in May 2023 which relate to the LTI 2020-2022.

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Base salary

The base salaries for both members of the Board of Management were indexed in 2024 (4%) in line with the 2023 CLA increase of the wider workforce as further laid-down in the remuneration policy. The total remuneration of the Board of Management in 2024 (and 2023) is outlined in the table above.

Short-term Incentive (STI) 2024

The STI, which rewards the delivery of short-term performance taking into account the interests of multiple stakeholders, is based on annual financial and non-financial performance measures on which targets are set for a one year performance period. Since vesting schemes are being applied as of 2024, a non-fully met target can still contribute to the STI pay-out. No pay-out occurs if performance is below threshold level of the relevant performance measure.

STI pay-out is based on actual performance as assessed by the Remuneration Committee and summarized in the table on the next page. The 2024 STI realisation amounts to 22.20% out of a maximum of 37.50%, which equals a pay-out ratio of 59.2%.

For 2024, full year profitability (normalised EBIT) came in at €53 million, which is significantly below threshold level. This unsatisfactory financial outcome is mainly explained by higher than expected client concentration in e-commerce and severe cost pressures in a tight labour market with rising wages and increasing absenteeism resulting in declining margins. Cash generation (free cash flow) this year came in at €12 million, which is above threshold level, fueled by well-executed cash and balance sheet management.

In 2024, PostNL managed to keep its average number one NPS position in the relevant markets, for mail, parcels and cross-border. This result reaffirms PostNL’s strong position versus competitors and shows PostNL’s commitment to customers, supporting the strategic direction.

The employee engagement score in 2024 was 67.0%, at target, but slightly lower than last year’s score. The tight labour market has impacted certain areas of PostNL’s operations significantly, notably at Mail in the Netherlands, resulting in increasing work pressure. Additionally, the ongoing high absenteeism levels and reorganisations that are necessary to adapt to a changing postal market, impacted the engagement scores. To improve employee engagement in 2024, a series of business changes were introduced. For example, more attention was paid to involving operational staff in organizational changes that are carried out.

Quality Mail Improvement was selected as new performance measure for 2024, focusing on a further improvement of the quality levels within the mail division. This new performance measure was defined as ‘the annual net inflow (new hires minus leavers) of mail deliverers in fte’, considering that delivery staffing is one of the most important drivers for mail quality. Facing a shortage of mail deliverers in certain regions, PostNL launched a job fulfilment program, which was very successful in reducing the number of vacancies in addition to the improvement of staff retention. The year 2024 resulted in a net inflow of 125 mail deliverers (in fte), which is above  threshold but below target level.

Quality Parcels was 97.4% in 2024, only slightly below target level. Due to unexpected high volumes, PostNL experienced delays, but because of the effective strategy and overperformance at the beginning of the year, one managed to keep delivery quality in line with 2023.

Long-term Incentive (LTI) 2022-2024

The LTI rewards long-term value creation to PostNL’s strategy and reinforces alignment with shareholder interests by granting shares. The plan is based on financial and non-financial performance measures on which targets are set for a 3-year performance period. Since vesting schemes are being applied, a non-fully met target can still contribute to the LTI pay-out.

Year-end 2024, the LTI 2022-2024 performance period ended. The Remuneration Committee assessed the achievements of the Board of Management over the three-year performance period. Relative weight, threshold level, target level and actual performance per performance measure are summarised in the table below. The LTI 2022-2024 was granted in 2022 and as such, originates from the previous remuneration policy which was adopted by the AGM in 2022.

Both Earnings attributable to shareholders (cumulative normalised comprehensive income) of €243 million and Cash generation (free cash flow) of €81m, have unfortunately ended up below threshold level.

The former remuneration policy of the Board of Management, applicable to the LTI 2022-2024, includes climate impact reduction as a performance measure under the LTI plan, to strengthen alignment with PostNL's sustainability goals. For the LTI 2022-2024, Climate impact is defined as ‘CO₂ efficiency of our own operations’ and measures the relative CO₂ reduction in grammes CO₂e per kilometre compared to base year 2017. Besides a threshold level and a target level, the climate impact performance measure also contains a qualifier. The qualifier for the LTI 2022-2024 was defined as ‘the absolute CO₂ emission in 2024 is lower than in 2021’. With CO₂ emission in grammes CO₂e per kilometre of 128 in 2024, compared to 203 grammes CO₂e per kilometre in 2021 and a 44.0% CO₂ reduction compared to the base year, both qualifier and target level were exceeded. The progress made in the period 2022-2024 was mainly driven by the further transition to electric vehicles, the continued expansion of renewable fuel usage such as HVO100 and the improvement of transport efficiency.

The LTI 2022-2024 realisation amounts to 12.50% out of a maximum of 37.50%, which equals a pay-out ratio of 33.3%

The applicable number of performance shares will vest in 2025 and are subject to a two-year holding period. In compliance with the Code, following a three-year performance period, the holding period for vested shares expires two years thereafter or at termination of employment/service if this occurs earlier. The holding period (together with the minimum shareholding requirement as described in section 'Share ownership’) aligns the long-term interest of the members of the Board of Management with our shareholders. Furthermore, the holding period ensures that the performance shares are held for a period of at least 5 years.

Shares held by the Board of Management

PostNL Shares held by Board of Management in shares
2023, 2024

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PostNL Share ownership as percentage of the minimum shareholding in %
2023-2024

1. 'Once achieved always achieved' principle applies for the CEO as from 2020 onwards.

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The table provides an overview of the shares held as a percentage of the minimal at year-end 2024 (and 2023) by the CEO and CFO. 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 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 after-tax 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 (for the current Board of Management members starting from 2020) in line with the remuneration policy.

The CEO has exceeded the minimum share ownership level since 2020. The CFO has not reached the minimum level yet. As shown in the table above, the percentage of share ownership in 2024 is lower than in 2023, which was mainly caused by the share price development.

Information on the change of remuneration and company performance

PostNL Performance/remuneration/internal pay ratio
2020-2024 (IFRS based)

1. Profitability is equal to normalised EBIT (see chapter 9 Financial value).
2. Earnings attributable to shareholders is equal to normalised comprehensive income (see chapter 9 Financial value).
3. IFRS based remuneration, for more information see note 5.1 of the performance statements.
4. Based on the total salaries, pensions and social security contributions (excluding the CEO and CFO) increased with the external temporary staff cost (from 2021 onwards) divided by the average number of FTE's (total of own personnel and external temporary staff) minus two as reported in the chapter 'Financial Statements' of the relevant years.
5. Herna Verhagen was CEO and Pim Berendsen was CFO over the presented years. Figures in conformity with the Code.

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The table 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).

Internal pay ratios

As described in the 2024 Board of management Actual remuneration paragraph, PostNL calculates the ratios between the annual total remuneration for the CEO and CFO and the average annual total remuneration for an employee. The pay ratio was 21.4 for the CEO in 2024 (2023: 21.6) and 16.0 for the CFO in 2024 (2023: 16.3), in line with foregoing years.

As from 2021 onwards, external temporary staff has been taken into account in the internal pay ratio calculation. This means that all FTEs of external staff hired have been taken into account when calculating the average number of FTEs. The related costs (see note 2.3.1 'Work contracted out and other external expenses' to the Consolidated financial statements for more information) are included in the calculation of the average remuneration per FTE. For administrative reasons, it is not feasible to make a distinction between external staff who have worked shorter/longer than 3 months for PostNL during the calendar year. As a result, no distinction is made in the duration of the activities performed by external staff for PostNL. The pay ratios 2024 excluding external temporary staff would have been 22.0 (2023: 22.1) for the CEO and 16.4 (2023: 16.7) for the CFO.