Remuneration report for 2019

New remuneration policy for Board of Management

A new, updated remuneration policy for the Board of Management of Stedin Group was prepared in 2019. After approval by the Supervisory Board at the end of 2019, the policy was also approved by the General Meeting of Shareholders on 7 February 2020. The new remuneration policy entered into force on 1 January 2020.

In the new policy, the net fixed expense allowance is set at the new amount of € 160 a month agreed with the tax authorities and the terms of the expense allowance have also been amended. This policy now also states that the Remuneration section of the Dutch Corporate Governance code is voluntarily applied.

The employee benefits package of the members of the Board of Management has not changed and will continue to comprise a fixed annual salary of 12 monthly salaries increased by a holiday allowance of 8% and a package of other remuneration components consisting of participation in the ABP pension scheme, 30 days of leave annually, the option of participating in the group health insurance and disability insurance, a net expense allowance and a fully electric lease car as of 2020. No variable remuneration is included in the employee benefits.

Executive Pay (Standards) Act

The Executive Pay (Standards) Act (Wet normering topinkomens, WNT) is applicable to the business units Stedin Netbeheer B.V. and Enduris B.V. The members of the Board of Management of Stedin Group are members of the highest executive body of Stedin Netbeheer. Accordingly, the WNT applies to them as senior executives. Gerard Vesseur stepped down as CFO of Stedin Group with effect from 1 January 2019 and therefore no longer qualifies as a senior executive. In the remuneration policy, the total remuneration of the members of the Board of Management is limited to the maximum remuneration permitted pursuant to the WNT. In 2019, that maximum was € 194,000. The WNT transitional rules do not apply to any of the four members of the Board of Management of Stedin Group. For each calendar year, the Supervisory Board determines the fixed annual salary of the members of the Board of Management on the basis of their performance, the company's results, developments in society and the remaining headroom up to the WNT standard in the calendar year concerned.

The director of DNWG Groep N.V., Koen Verbogt, qualifies as senior executive of Enduris B.V. on a 50% basis pursuant to the WNT. He is director of the infrastructure company DNWG Infra on the remaining 50% basis.

The WNT also applies to the members of the Supervisory Board of Stedin Group. They qualify as senior supervisory directors. Based on the remuneration policy that took effect last year, the maximum remuneration for the chair and for the members of the Supervisory Board is 15% and 10% of the applicable WNT standard respectively.

Disclosures on remuneration

The reporting on the WNT remuneration of Stedin Group is part of the Notes to the consolidated financial statements, section 6.2 WNT compliance for 2019 by Stedin Netbeheer B.V. and Enduris B.V..

With the exception of the four members of the Board of Management and the former CFO, all employees of Stedin Group are employed by Stedin Groep Personeels B.V. rather than by Stedin Netbeheer B.V. or Enduris B.V. The obligation under the WNT to report on other executives with remuneration in excess of the individually applicable threshold amount does not apply to Stedin Groep Personeels B.V. Disclosing this information after all may constitute a breach of the privacy of the executives concerned pursuant to the General Data Protection Regulation (GDPR). The reporting therefore does not contain a complete overview of other executives employed by Stedin Group whose remuneration exceeds the WNT standard. While Stedin Group is aware that the view provided of the remuneration within the organisation is incomplete as a result, it sets store by respecting the privacy of its employees.

Since the WNT became applicable to Stedin Group, the organisation has sought to reduce both the number of cases in which and the amounts by which the WNT standard is exceeded within the group. With effect from 2019, this process resulted in a new remuneration policy at Stedin Groep Personeels B.V. for the management layer that reports directly to the Board of Management. Similar to the employee benefits package of the Board of Management, the employee benefits have been simplified and largely converted into fixed annual salary consisting of 12 monthly salaries plus a holiday allowance of 8%. The two highest salary scales have been replaced with a single new salary scale that has a lower scale maximum. The maximum of that scale in 2019 was € 155,000 per year, including a holiday allowance of 8%. Variable performance-related remuneration has been eliminated and added to the fixed salary. In 2018, a total of five non-senior executives within Stedin Group exceeded the individually applicable threshold amount. Owing to the introduction of the new remuneration policy, a double bonus payment occurred in 2019 at Stedin Groep Personeels B.V., as variable performance-related remuneration for 2018 on the one hand and as an addition to the fixed salary in 2019 on the other. This effect is non-recurring. As a result, however, the total number of cases in which the WNT standard was exceeded was 11 in 2019. After correcting for the one-off impact by disregarding the variable performance-related remuneration at Stedin Groep Personeels B.V. for 2018, the number of cases in which the standard was exceeded was in fact as high as in 2018.

Pursuant to the WNT, Stedin has decided not to report on specific remuneration information on the grounds of Section 383(1) and Section 383c of Book 2 of the Dutch Civil Code. No rights to subscribe to or acquire shares in the capital of the company or a subsidiary have been granted to members of the Board of Management or Supervisory Board of Stedin Group. Nor have any loans, advances and guarantees been provided to the members of the Board of Management or Supervisory Board of Stedin by the company, its subsidiaries or the companies whose financial information is consolidated by Stedin.

Pay ratios

The ratio between the highest remuneration and the median remuneration decreased further in 2019 to 4.03. This ratio is almost 14% lower than in 2018, when the ratio was 4.67. The decrease resulted from the lower highest remuneration and the higher median remuneration. This ratio was determined by reference to the annual pay for pension purposes of employees working at the business units that were part of Stedin Holding N.V. as at 31 December 2019. The annual pay for pension purposes is a uniform and objective remuneration concept which includes 12 months' full-time salary, 8% holiday allowance and variable payments, such as payments for on-call shifts and emergency repair shifts, collective profit sharing, and one-off payments for service anniversary bonuses and payments at the end of the employment, among other things.