Remuneration report for 2020

Remuneration policy for the Board of Management

A new, updated remuneration policy for the Board of Management of Stedin Group became effective on 1 January 2020. The Supervisory Board (SB) approved the new policy at the end of 2019, and on 7 February 2020, it was also approved by the General Meeting of Shareholders.

The main changes in terms of content of the remuneration policy relate to the net fixed expense allowance of €160 per month. The total employee benefits package consists, on the one hand, of a fixed annual salary and, on the other, of a number of other elements of remuneration. The members of the Board of Management do not receive variable remuneration. The fixed annual salary consists of 12 monthly salaries plus 8% holiday allowance. The other elements of remuneration provide for participation in the ABP pension scheme, 30 days of leave annually, the option of participating in the group health insurance and invalidity insurance, a net expense allowance and a fully electric lease car. Each year, the Supervisory Board determines the fixed annual salary of the members of the Board of Management.

Senior Executives in the Public and Semi-Public Sector (Standards for Remuneration) Act

The Senior Executives in the Public and Semi-Public Sector (Standards for Remuneration) Act (Wet Normering Topinkomens, WNT) is applicable to the business units Stedin Netbeheer B.V. and Enduris B.V. The Board of Management of Stedin Group is also the highest executive body of the grid manager Stedin. The four members of the Board of Management qualify as senior executives of Stedin Netbeheer B.V. pursuant to the WNT. In addition, the director of DNWG Groep N.V. qualifies as a senior executive of Enduris B.V. pursuant to the WNT, on a 50% basis. He is the director of the infrastructure company DNWG Infra B.V. on the remaining 50% basis. Unlike the Board of Management, the director of DNWG Group is not employed by the grid manager. He therefore qualifies as a senior executive without employment.

The remuneration policy for the Board of Management limits the total remuneration of the members of the Board of Management, which may not exceed the general maximum remuneration under the WNT. In 2020, that maximum was €201,000. The WNT transitional rules apply neither at Stedin Netbeheer B.V. nor at Enduris B.V.

The WNT also applies to the members of the Supervisory Board of Stedin Group. They qualify as senior supervisory directors. Under the remuneration policy for the Supervisory Board, 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, WNT compliance for 2020 by Stedin Netbeheer B.V. and Enduris B.V..

COO Judith Koole was absent for a long time in 2020. An operational director was temporarily appointed for the portion of her work that relates to directing operations. Her strategic activities were taken over by CEO Marc van der Linden and CTO David Peters. The interim operational director does not qualify as a senior executive pursuant to the WNT. Judith Koole's term of office as a member of the Board of Management will expire on 1 February 2021. In consultation with the Supervisory Board, Judith Koole indicated that she would step down as a member of the Board of Management of Stedin Holding N.V. She will continue at Stedin for a considerable time. With effect from 5 December 2020, she ceased to be a senior executive of Stedin Netbeheer B.V.

As of 1 January 2020, several amendments were implemented in the WNT Implementing Regulations. One of those amendments concerns the requirement to disclose the remuneration at the affiliated entity if there is an overlap of the activities as a senior executive and the activities at an affiliated entity. DNWG Staff B.V. is an affiliated enterprise of Enduris B.V. DNWG Infra B.V. and Enduris B.V. are not affiliated. Full application of the implementing regulations means that the WNT in effect encompasses the enterprise DNWG Infra B.V., even though that is not required to comply with the WNT. Therefore, the total remuneration of the director of DNWG Group including DNWG Infra is disclosed in the Notes to the consolidated financial statements in a separate table.

Except for the Board of Management, employees of Stedin Group are employed by a personnel company (Personeels B.V.). Personnel companies are not subject to a requirement to report on other executives who receive remuneration exceeding the individually applicable threshold amount. Disclosing this information after all may constitute a breach of the privacy of the executives concerned pursuant to the General Data Protection Regulation (GDPR). Therefore, Stedin Group does not report this information. Nevertheless, Stedin Group does specifically take account of the WNT in remunerating its employees. This is reflected, for instance, in the new remuneration policy (effective as from 2019) for the management layer that reports to the Board of Management at Stedin Groep Personeels B.V. The contents of that remuneration policy are similar to those of the Board of Management and no longer provide for variable remuneration. The maximum salary according to the salary scale including 8% holiday allowance was approximately €162,000 in 2020. Stedin Group also applies the maximum hourly rate under the WNT as the maximum rate for external staff hired to temporarily fill senior management positions. In 2020, that maximum was €193 per hour.

In 2020, the number of other executives who receive remuneration exceeding the individually applicable threshold amount decreased to one. They numbered 11 in the preceding year and 5 in 2018. The number of cases that exceeded the threshold was higher only in 2019 due to the introduction of the new remuneration policy at Stedin Groep Personeels B.V. In that year, the variable performance-related remuneration was converted into fixed salary; in addition, the payment of the variable remuneration for 2018 was effected. Adjusted for this non-recurring effect, however, the number of cases that exceeded the threshold in 2019 was the same as in 2018.

Pursuant to Section 4.2 of 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 or 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 2020, for the third consecutive year, to 3.50. That is more than 13% lower than the ratio in 2019 (4.03). This year, the decrease in the ratio was again a combination of an increase of the median remuneration and a decrease of the highest remuneration. That ratio is -4.38. The remuneration 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 2020. The annual pay for pension purposes is a uniform and objective remuneration concept that includes 12 months' full-time salary, 8% holiday allowance and variable payments, such as payments for on-call shifts and emergency repair shifts, one-off payments for service anniversary bonuses and payments at the end of the employment, among other things.