Adoption of remuneration policy
The Supervisory Board approved the remuneration policy for the Executive Board of Royal HaskoningDHV based on a proposal of the Remuneration and Appointment Committee. The remuneration policy was adopted by the AGM in 2020. The policy is designed to be able to attract, reward, incentivise and retain qualified and expert individuals that the company needs to achieve its strategic objectives. The remuneration policy provides for a fixed component and a variable component (short-term incentive). The company does not operate a long-term incentive scheme.
The current remuneration of the Executive Board is based on a comparative study done in 2019 by an independent firm specialising in executive remuneration, on the basis of remuneration in peer companies, that is companies operating in a comparable (international) market with a roughly similar risk profile and size as Royal HaskoningDHV. The Supervisory Board evaluated the remuneration package of the Executive Board. Compensation is benchmarked by using the median of the relevant reference market for Royal HaskoningDHV. The elements of compensation that are taken into account include base salary and the short-term incentive. Furthermore, the ratio between the total remuneration of the Executive Board relative to the average remuneration in the company, is taken into consideration. The Supervisory Board will evaluate the remuneration package of the three headed Executive Board based on an update of this study in Q1 2023. A retroactive adjustment in salary to our third board member may be expected in 2023.
Fixed remuneration component
The Supervisory Board of Royal HaskoningDHV aims to offer its Executive Board a fixed remuneration component targeted at approximately median level of the relevant reference market for Royal HaskoningDHV.
Variable remuneration component
The Supervisory Board determines the variable remuneration component for the members of the Executive Board. As mentioned, Royal HaskoningDHV only provides for a short-term incentive, not a long term incentive scheme. The variable component is based on the overall performance of the company, whereby this variable component is challenging, but not beyond reach. The performance criteria for the variable pay of the Executive Board members are aligned with the strategic objectives of the company and include both financial (new business revenue, EBITA, overhead costs) as non-financial metrics (employee engagement, score on sustainability and social targets as part of Enhancing Society Together and digital maturity).
The variable remuneration for the Executive Board is intended to drive the pursuit of Royal HaskoningDHV’s objectives. The maximum annual variable remuneration component amounts to 40% of the gross fixed remuneration. The variable income is, as a standard, payable in depositary receipts until the maximum holding (which is the same for all employees) is achieved.
The Supervisory Board has verified and is comfortable with the potential pay-out of the variable remuneration component for various scenarios as prescribed by the Netherlands Corporate Governance Code.
Pensions and risk premium
Pursuant to the policy applicable to all staff members in the Netherlands, the company contributes to the cost of pension and the premium for partner pensions and disability. Equally, the members of the Executive Board are compensated for the reduction of the maximum pension accrual pursuant to the Reduction of Maximum Pension Accrual and Contribution Rates and Maximum Pensionable Income Act (Wet verlaging maximumopbouw- en premiepercentages pensioen en maximering pensioengevend inkomen) (Witteveen Framework 2015).
In the event of termination of the employment contract on Royal HaskoningDHV’s initiative, a member of the Executive Board is entitled to a severance payment of one year’s gross fixed annual remuneration. There is no right to the severance payment if the contract is being terminated due to urgent cause or serious culpability.
Royal HaskoningDHV offers the members of its Executive Board a package of secondary employment benefits in accordance with those offered to other staff. The benefit package includes disability insurance, a company car and a Director’s Liability insurance. The company does not issue loans, advance payments or guarantees to the members of its Executive Board.