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Structure of the remuneration package
Fixed salary

For Schiphol Group, the basic principle is that the fixed salary component for Management Board members amounts to approximately 80% of the maximum fixed salary that can be attained by the President of the Management Board (CEO).

From the market study that we carried out at the time of the appointment of the new CFO, it became apparent that the 80 percent rule was insufficiently in line with the market. Therefore, the Supervisory Board has set the fixed salary component at a higher level than proposed in exchange for a more limited variable salary component.

 

Position

Total Fixed Income

Periode in 2012

Proportionally

Jos Nijhuis

CEO

€ 384,711

Full year

 

Ad Rutten

COO

€ 300,512

Full year

 

Maarten de Groof

CCO

€ 300,512

Full year

 

Pieter Verboom

CFO

€ 300,512

Until 1 August 2012

€ 175,299

Els de Groot

CFO

€ 325,000

As from 1 April 20121

€ 243,750

  • The actual date of entering the company's employment was one month before the actual appointment date as Managing Director under the company's articles of association and CFO in connection with a transfer period.
Variable salary

The Supervisory Board regards the variable salary as an essential component of the total remuneration package as this makes it possible to highlight specific objectives in the management of the company. The level of the variable salary component is linked directly to the realisation of these objectives. These objectives are assessed at the end of the first quarter based on the latest developments; if necessary these are adjusted accordingly. In this manner, the Supervisory Board strives to maintain challenging and realistic budget and other objectives.

Short-term variable incentive

The attainable annual short-term variable pay depends on the achievement of financial targets and on a number of personal and/or team-related targets and on the Supervisory Board's assessment of the overall performance of the individual Management Board members. The assessment of the overall performance has been further specified in a list containing the main objectives for the year for the Management Board members. For instance, this may concern the relationship with various stakeholders and the representation of Schiphol Group in the public domain. Arriving at an assessment of the above is part of the Supervisory Board's discretionary powers.

The financial target consists of the net result divided by the average equity (ROE) in accordance with the annual budget as approved by the Supervisory Board. The personal and/or team-related performance targets may vary from year to year and relate to aspects such as operating processes, the airport's socio-economic role and Corporate Responsibility. In 2012 again, in view of the nature of the targets, a limited number of individual targets were applied.

The total on-target level of the short-term variable incentive (STI) pay equals 35% of the fixed salary. If the levels as defined for the financial targets are exceeded, this may result in at most 1.625 times the defined on-target level for that component for the President and at most 1.67 for the other Management Board members. Consequently, in the event of an exceptional performance (the target is exceeded by 10% or more), the maximum short-term variable incentive pay is 47.5% of the fixed salary for the President and 45.1% thereof for the other Management Board members. The extent to which the defined targets have been achieved is determined in part on the basis of the externally audited financial statements.

For the new CFO, Ms De Groot, the on-target value of the STI pay amounts to 19.38% with a maximum of 27.23% of the fixed salary (in the event of exceeding the target by 20% or more for the financial and the personal performance targets). Her arrangement differs from the existing arrangements in anticipation of the future remuneration policy.

The next table provides insight into the actual components of the short-term variable incentive pay expressed in percentages of the fixed salary.

 

Jos Nijhuis

Ad Rutten

Maarten de Groof

Pieter Verboom

Els de Groot

Financial target

20%

15%

9.69%

Personal performance targets

7.5%

15%

4.85%

Overall performance

7.5%

5%

4.85%

Total (excluding swing)

35%

35%

19.38%

Maximum swing percentage

12.5%

10%

7.85%

Total (including maximum swing)

47.5%

45.1%

27.23%

Long-term variable incentive

Schiphol Group is not a stock-listed company, which is why it is not possible to grant Schiphol Group shares and/or share options as part of the remuneration policy. Nevertheless, the Supervisory Board considers it important that the remuneration of Management Board members also reflects the extent to which solid results have been realised. Therefore, a long-term variable incentive scheme with a three-year time horizon has been set up. The long-term variable incentive scheme (LTI) is a conditional, annual remuneration component and specifies an on-target payment level of 35% of the fixed salary.

The actual payment depends on the cumulative Economic Profit (EP) achieved over a period of three consecutive financial years, which are compared with the medium-term business plan approved by the Supervisory Board and the EP targets specified in this plan. In the event of exceptional results, whereby the pre-determined performance criteria are exceeded by more than 10%, the long-term incentive payment can amount to a maximum of 52.5% of the fixed salary.

Here as well, the arrangement for the new CFO, Ms De Groot, differs in anticipation of the new remuneration policy. The on-target level of the LTI payment for Ms De Groot amounts to 17.38% of the fixed salary with a maximum of 27.04% (in the event that the target is exceeded by more than 20%). In addition, the time horizon has been extended to four years. This means that the level of the payment is determined based on a consolidated series of four consecutive EP results and that a possible payment in connection with these results is also only determined after four years.

For that matter, in 2011, the Supervisory Board formulated a more ambitious performance target for the LTI 2010-2012. This is in line with the reasoning behind the adjustment of the STI targets 2011. This has the net effect that the large surplus EP achieved in the financial year 2010 was adjusted downwards.

At the end of each year, an estimate is made of the short-term and long-term variable incentive pay to be paid out. A pro-rata share of the amount thus calculated is accounted for in and attributed to the relevant year. Payment will only be made on condition that the Management Board member is still employed by the company at the end of the relevant period. If the employment contract is terminated by mutual agreement or due to retirement, a pro-rata allocation is made. In that case, it is also possible to determine the future allocation and pay it out in advance.

The performance contracts with each of the members of the Management Board contain a claw-back clause (Corporate Governance Code provision II.2.11) and a provision allowing the Supervisory Board to retrospectively adjust variable remuneration in certain cases (Corporate Governance Code provision II.2.10).

Pension arrangements

The defined pension scheme is based on the average earnings scheme applicable as from 1 January 2004, in accordance with the Algemeen Burgerlijk Pensioenfonds (ABP) regulations. The pensionable salary equals the fixed salary. The ABP calculates the amount of the contribution payable to the pension scheme each year. The pension contribution is paid in full by the company.

Based on agreements made in the past, four Management Board members have a supplementary agreement.

Mr Rutten

Mr Rutten may retire at the age of 62. He has defined retirement benefits equalling 70% of his final total fixed salary. To this end, up to and including 2011, a supplementary allocation was made each year, in as far as necessary, for the 'ABP Extra Pension' (AEP), in addition to the accrual based on the fixed salary under the ABP average earnings scheme. In 2012, agreement was reached with Mr Rutten to refund non-payable retained premiums paid for the 'partner plus pension' and to use the proceeds of this pension to finance the partner pension. For this reason, an amount of 33.610 euros was refunded to Mr Rutten in 2012.

As Mr Rutten's term of office has been extended by one year, an actuarial recalculation of his pension will be made in connection with the later retirement date. It has been agreed with Mr Rutten that he will continue to accrue pension entitlements as from 1 September 2013 (when he is 62) based on the ABP average earnings pension scheme until 1 September 2014.

Mr Verboom

Mr Verboom's retirement pension commenced on 1 August 2012. With regard to Mr Verboom's extra partner pension, the same construction applies as for Mr Rutten. Therefore, an amount of € 44,919 was refunded to Mr Verboom in 2012.

Mr Nijhuis and Mr De Groof

It has been agreed with Mr Nijhuis and Mr De Groof that their employment contracts will be terminated at the age of 62. They receive an annual fixed salary supplement that can (at present) be used for a life-course savings scheme. An actuarial calculation has been made of the amount of the supplement based on the fiction that between the age of 62 and 65 no pension accrual will take place in the active employment of the N.V. Luchthaven Schiphol.

Audit of pension agreements

At the initiative of the Remuneration Committee, an external agency performed an audit in 2012 as to the correct and comprehensive reporting of the pension agreements that have been made with individual Management Board members. No material shortcomings came to the fore in this audit. However, the agency did advise that the agreements that have been made should be reconfirmed unequivocally and, where necessary, in writing. The agency also advised that the deviating pension agreements with Mr Verboom and Mr Rutten should be submitted to the Tax Authorities for approval. The Supervisory Board followed this advice and the Tax Authorities has now approved the agreements.

Other benefits

The secondary benefits comprise appropriate expense allowances, a company car and the use of a telephone. The company has also taken out personal accident insurance and director's liability insurance on behalf of the Management Board members. No loans, advances or guarantees were or will be granted to members of the Management Board. A restrictive policy applies with regard to other offices; the acceptance of other offices requires the explicit approval of the Supervisory Board.