REMUNERATION
REPORT
2010
Mega trailing suction hopper dredger the Queen of the Netherlands at work in the Maldives. In 2010 work to raise four islands to protect the local population was successfully completed.
Ve r k o r t e f i n a n c i ë l e i n f o r m a t i e o v e r 2 0 1 0
Table of contents
Introduction
2
Remuneration policy for the Board of Management
4
Execution of remuneration policy in 2010
8
Remuneration policy for the Supervisory Board
9
o yi na sl tBe or snkva l i s We s t m i n s t e r n v R o y a l B o s k a l i s We sRt m
1
IVe n trrkoodrut e c t fi o i nna n c i ë l e i n f o r m a t i e o v e r 2 0 1 0
Introduction
Members of the Remuneration Committee The Remuneration Committee consists of two
Duties and responsibilities of the Remuneration Committee
members: C. van Woudenberg (chairman) and M.P.
The Remuneration Committee performs the
Kramer.
following duties: •
Putting forward a proposal to the Supervisory
The Remuneration Committee availed itself of the
Board with regard to the remuneration policy
services of an independent remuneration adviser
to be pursued for the Board of Management.
and ascertained that this remuneration adviser
The policy is submitted for approval by the General Meeting of Shareholders.
does not provide advice to the members of the Board of Management.
•
Putting forward a proposal to the Supervisory Board with regard to the remuneration of individual members of the Board of Management (in accordance with the remuneration policy adopted by the General Meeting of Shareholders).
•
Compiling the remuneration report on the remuneration policy pursued, subject to adoption by the Supervisory Board.
2
Remuneration report 2010
IVe n trrkoodrut e c t fi o i nna n c i ë l e i n f o r m a t i e o v e r 2 0 1 0
Activities during 2010
continue to closely monitor developments in the
The Remuneration Committee met six times
Dutch market during 2011 and beyond, and consider
during 2010, with none of the members of the
whether any (internal or external) developments
Remuneration Committee having been absent from
occur which require the policy to be revised.
the meetings. The committee also held regular consultations outside these meetings.
Amongst other activities the Remuneration Committee:
In the course of 2010 the Remuneration Committee
•
kept itself up to date with the most recent
considered whether the Boskalis remuneration
developments in Corporate Governance, both in
policy is appropriate given current and expected
the Netherlands and internationally;
conditions on the Dutch market and whether it
•
conducted a remuneration survey to inform
complies with Corporate Governance guidelines.
itself about developments with respect to
Based on these considerations and in light of the
executive remuneration policies in the Dutch
merger with Smit Internationale N.V. completed
and international markets (including amount,
in 2010, the Remuneration Committee advised
performance measures, composition of
the Supervisory Board to make a limited number
remuneration package);
of adjustments to the remuneration policy. These
•
submitted an amendment proposal to simplify
adjustments, which will be explained further on in
the structure and calculation of the quantitative
this report, will help to further enhance the degree
measures for short-term and long-term
of transparency and accountability with regard
bonuses;
to the policy. The Remuneration Committee will
•
conducted scenario analyses .
R o y a l B o s k a l i s We s t m i n s t e r n v
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Remuneration policy for the Board of Management
Remuneration policy for the Board of Management
Change to variable long-term element
The remuneration policy for the Board of Management was adopted by the General Meeting
Under the current remuneration policy the long-term
of Shareholders on 8 May 2006. The remuneration
bonus scheme is also made up of two elements. The
policy is appropriate to the strategy and core
first element is aimed at creating shareholder value and
values of Boskalis, which are centered on long-term
the other at realizing the corporate strategy in the longer
orientation and continuity and take into account
term.
the interests of Boskalis’ shareholders, clients, The part which is linked to creating shareholder value will
employees as well as the ‘wider environment.’
also cease to be linked to EVA from 2011. Instead this On the advice of the Remuneration Committee the
part will be fully dependent on the development of the
Supervisory Board proposed to the Extraordinary
share price.
General Meeting of Shareholders on 21 January 2011 that the remuneration policy adopted in 2006 be
This change in the method of determining the short-term
revised.
and long-term bonuses will have no material impact on the outcome of the bonus calculation.
The reason for effecting a limited change to the current remuneration policy lay in the structure and
This proposal was adopted by the Extraordinary General
calculation of the quantitative measures for the
Meeting of Shareholders on 21 January 2011.
short-term and long-term bonuses. In practice these have proved to be unnecessarily complicated and
The remainder of the remuneration policy has been
based on insufficiently coherent valuation principles
retained unchanged. The full text of the revised
(Economic Value Added, hereinafter EVA). In addition,
remuneration policy can be found on the Boskalis
the change incorporated the latest amendments to
company website (www.boskalis.com).
both the law and the Dutch Corporate Governance Scenario analysis
Code, which are currently already applicable to
The following scenario analysis (margins and results)
Boskalis.
shows an unchanged picture of the policy as adjusted in comparison to the bonus policy which applied in 2010.
Change to variable short-term element Under the remuneration policy adopted in 2006 the short-term bonus is made up of two equally weighted
Low
elements - a qualitative part and a quantitative part.
•
Poor score on ST/LT objectives (25%)
This format and what was agreed with respect to the
•
Share price drop of 25%
qualitative part of the calculation method will remain
Medium
unchanged. However, with regard to the quantitative
•
’At target’ score on ST/LT objectives (50%)
part from 2011 performance will no longer be linked
•
Share price stable
to EVA, but related to the net result achieved by
High
Boskalis in a certain financial year relative to the
•
Maximum score on ST/LT objectives (75%)
budget for that same financial year.
•
Share price increase of 30%
Chief Executive Officer
Fixed
ST bonus
LT bonus
Total
Low
100
25
19
144
Medium
100
50
50
200
High
100
75
98
273
Scenario analysis (in %)
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Remuneration report 2010
Remuneration policy for the Board of Management
Randstad, SBM Offshore, TNT, Wolters Kluwer, CSM,
Labor market peer group The amount and composition of the remuneration
Imtech, Nutreco and Vopak.
package is determined using a labor market peer group consisting of a mix of 12 Dutch companies
Elements of remuneration
(listed on the AEX and AMX indices) which are
The table below provides an overview of the
comparable to Boskalis in terms of size and ope-
remuneration package for members of the Board of
rating activities. This peer group, which is regularly
Management (including pay-out levels and – where
reviewed, consists of: DSM, BAM, Corio, Fugro,
applicable – performance measures).
Type of remuneration
Element of remuneration
Fixed
A. Basic salary (in € 1,000)
Performance period & -measures
Pay-out CEO: € 573 BoM member: € 414,5
B. Pension plan Variable
C. Short-term bonus
D. Long-term bonus
Period: 1 year Performance measured: • 50 per cent annual return (net profit + interest on long-term loans / average invested capital) • 50 per cent individual targets
At target CEO: 50% of basic salary Maximum CEO: 75% of basic salary
Period: 3 years Performance measured: • 50 per cent for economic value added (EVA)* • 50 per cent for realizing corporate policy
At target CEO: 50% of basic salary x % change share price Maximum CEO: 75% of basic salary x % change share price
At target BoM member: 45% of basic salary Maximum BoM member: 67,5% of basic salary
At target BoM member: 45% of basic salary x % change share price Maximum BoM member: 67,5% of basic salary x % change share price
Remuneration Package Board of Management * From 2011 performance measures are no longer linked to EVA
R o y a l B o s k a l i s We s t m i n s t e r n v
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Remuneration policy for the Board of Management
Ad A – Basic Salary. Basic salary of the members
Supervisory Board also has the authority to
of the Board of Management was adjusted in
demand repayment of the short-term bonus in the
2010 in line with the development of the group,
event it was awarded on the basis of incorrect
in accordance with the remuneration policy as
financial or other information (‘claw-back clause’).
adopted by the General Meeting of Shareholders. Ad D – Variable long-term element. The members of the Board of Management participate in a Ad B – Pension plan. The members of the Board of
long-term (three-year) remuneration scheme. The
Management participate in the pension scheme of
amount of the long-term element depends on the
the foundation Stichting Pensioenfonds Boskalis.
share price development and the extent to which
Since 1 January 2004 pension accrual has been
certain long-term objectives are achieved, namely
based on average earnings; retirement age is 65.
Economic Value Added (EVA) and corporate targets such as safety policy, revenue and profit growth, and staff development. The Supervisory Board
Ad C – Variable short-term element. The
defines objectives in the above areas and payment
Supervisory Board defines objectives for annual
of the long-term element is subject to these being
return and individual performance, and payment
met.
of the short-term element is subject to these being met. Examples of individual targets include
At the start of the performance period a basic
acquisitions and specific commercial performances
bonus amount is established equal to the ‘at target’
(varying according to the position held on the
percentages (50% of fixed annual income for the
Board of Management).
chairman of the Board of Management and 45% for the other executives).
Individual targets are assessed in terms of quality and/or quantity (depending on the specific target),
Share price development is measured by the ratio
while annual return is determined solely in terms of
between the average share price over the three
quantity. The external auditor is involved in the final
months prior to commencement and at the end of
determination of the variable short-term element
the three-year performance period.
and is responsible for ensuring that the relevant procedures are followed correctly.
In addition to share price development the amount of the bonus is ultimately determined by the degree
Individual performance objectives are directly
to which the stated objectives were met over the
derived from Boskalis’ strategic agenda and are in
past three-year period. EVA is assessed in terms
line with the corporate objectives defined for 2010.
of quantity, while the corporate objectives are
The Supervisory Board ascertains that the short-
largely assessed in terms of quality. The external
term remuneration element is structured in such
auditor is involved in the final determination of the
a way as not to encourage the taking of risks that
variable long-term element and is responsible for
conflict with sound business practice.
ensuring that the relevant procedures are followed correctly. In accordance with the decision of the
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The Supervisory Board has the authority to
Extraordinary General Meeting of Shareholders
adjust the pay-out if exceptional circumstances
of 21 January 2011, from 2011 the performance
have arisen during the performance period. The
measures will no longer be linked to EVA.
Remuneration report 2010
Remuneration policy for the Board of Management
This means that the variable income of members of
The employment contracts of members of the
the Board of Management depends in part on the
Board of Management who joined the company
Boskalis share price and is therefore linked to the
subsequent to the introduction of the Dutch
value of the company. The corporate objectives are
Corporate Governance Code (i.e. after 2004)
directly derived from Boskalis’ strategic agenda.
comply with the requirements set with regard to
The Supervisory Board ascertains that the long-
maximum severance pay.
term remuneration element is structured in such a way as not to encourage the taking of risks that
•
The package of secondary employment
conflict with sound business practice.
conditions offered by the company is in
The Supervisory Board has the authority to
line with the market (including phone, car, expenses).
adjust the pay-out if exceptional circumstances have arisen during the performance period. The
•
extended to executives.
Supervisory Board also has the authority to demand repayment of the long-term bonus in the
No loans, advances or guarantees will be
•
Positions outside the company may only be
event it was awarded on the basis of incorrect
accepted with the explicit prior approval of
financial or other information (‘claw-back clause’).
the chairman of the Supervisory Board.
Other terms and conditions The table below provides an overview of the duration of the employment contracts, terms of office and severance pay of the members of the Board of Management.
Total remuneration
Duration of contract
Term of office
Severance pay
Dr. P.A.M. Berdowski Chief Executive Officer
indefinite
indefinite
1,5 years
J.H. Kamps Chief Financial Officer
4 years
4 years
2 years
T.L. Baartmans member of the Board of Management
4 years
4 years
1 years
B. Vree member of the Board of Management
indefinite
indefinite
2 years
(From 1 April 2010 to 31 December 2010)
Duration employment contracts, term of office and severance payments members of Board of Management
R o y a l B o s k a l i s We s t m i n s t e r n v
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Execution of remuneration policy in 2010
In 2010 the remuneration policy was executed
The table on the page below provides an overview of
in accordance with the remuneration policy as
the costs incurred by Boskalis in the 2010 financial year
adopted by the General Meeting of Shareholders on
in connection with the remuneration of its executives
8 May 2006.
(2008 and 2009 are shown for reference purposes).
Total remuneration (in € 1.000) (costs incurred by the company in the financial year concerned)
Fixed remuneration
Variable remuneration
Financial year
Basic salary
Short-term remuneration
Long-term remuneration
Pension
Total
Dr. P.A.M. Berdowski Chief Executive Officer
2010 2009 2008
€ 573 € 560 € 489
€ 422 € 367 € 349
€ 408 € 326 € 996
€ 126 € 117 € 91
€ 1,529 € 1,370 € 1,925
J.H. Kamps Chief Financial Officer
2010 2009 2008
€ 415 € 405 € 365
€ 275 € 247 € 219
€ 254 € 209 €0
€ 87 € 82 € 65
€ 1,031 € 943 € 649
T.L. Baartmans member of the Board of Management (from 5 september 2007)
2010 2009 2008
€ 415 € 405 € 365
€ 275 € 247 € 197
€ 226 €0 €0
€ 87 € 82 € 65
€ 1,003 € 734 € 627
B. Vree member of the Board of Management (from 1 April 2010 to 31 December 2010)
2010
€ 280 1
€ 328 2
€0
€ 51
€ 659
Overview remuneration costs members Board of Management for the financial year 2010. In addition B. Vree was awarded severance payment equaling two times his annual salary, for a total of (in € 1,000) € 829. Furthermore, in connection with the termination of his contract, effective 1 April 2011, in salary, pension contributions and variable remuneration (in €1,000) € 95, € 17 and € 109 respectively. 2 This amount is payable in 2011. 1
During 2009 the objectives set for the short-term remuneration element were exceeded. This resulted in the maximum pay-out of the variable short-term element in 2010 (75% of basic salary for the chairman and 67.5% for members of the Board of Management). Pay-out of the long-term element over the period 2007-2009 exceeded ‘at target’ level: 67.5% of basic salary for the chairman and 62% of basic salary for members of the Board of Management. In the opinion of the Supervisory Board the remuneration granted is in keeping with the performances achieved in both 2009 and 20072009. The performances achieved contributed towards the realization of Boskalis’ strategic agenda.
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Remuneration report 2010
Veerm R ko un r teer af itni oann cpi o ële i c yi n f o r mt haet i eS uopve r v2i s0o1r0y B o a r d
Remuneration policy for the Supervisory Board
The remuneration policy for the Supervisory
The table below provides an overview of the annual
Board was adopted by the General Meeting of
and committee allowances for the Supervisory
Shareholders in 2007. During 2010 the remunera-
Board:
tion policy was executed in accordance with the remuneration policy as adopted.
(in € 1.000) Chairman of the Supervisory Board
50
Member of the Supervisory Board
35
Chairman of the Audit Committee
9
Member of the Audit Committee
Chairman of the Remuneration Committee
6
Member of the Remuneration Committee
4
Chairman of the Selection and Appointment Committee
3
Member of the Selection and Appointment Committee
2
6
Overview annual and committee allowances Supervisory Board
In addition members of the Supervisory Board receive an annual expenses allowance of € 2,368. Supervisory Board members are not remunerated in shares, nor will any loans, advances or guarantees be extended to members of the Supervisory Board.
R o y a l B o s k a l i s We s t m i n s t e r n v
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Royal Boskalis Westminster nv Rosmolenweg 20 3356 LK Papendrecht The Netherlands P.O. Box 43 3350 AA Papendrecht The Netherlands Telephone +31 78 69 69 000 Telefax +31 78 69 69 555 E-mail Internet
[email protected] www.boskalis.com
