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The remuneration and appointments committee consists of Joost van Heyningen Nanninga (chairman) and Cor Brakel.
principal featureS of the 2008 remuneration policy. The remuneration policy aims to attract and retain good management for a publicly listed, interna- tionally operating company. Policy is formulated on the basis of what is considered to be in line with the market and to determine this the remuneration packages of other directors in the peer group, companies listed in the AMX and a number of AEX companies were reviewed. In the opinion of USG People, the level of remuneration is meant to ensure that experienced directors are attracted and kept motivated to perform at a level that adds value to USG People. There should be a balance between the operating results in the short term and sustainable value for the company over the long term. This clearly involves a commitment to enhance shareholder value. Further- more, the remuneration of the Executive Board should be in the right proportion to the rest of senior management of USG People.
executive Board. The remuneration of the Executive Board consists of four components:
a) fixed salary
b) variable short-term bonus. USG People uses a variable bonus system for the remuneration of senior management and also elsewhere in the organisation. This variable bonus is calculated by means of a matrix which includes revenue, EBITA and DSO.
For the Executive Board this bonus amounts to a maxi- mum of 0.2 per cent of the company’s operating result before amortisation, up to a maximum of one year’s salary. This 0.2 per cent is divided into two components: 0.1 per cent is calculated over the company’s operating result before amortisation (EBITA) and 0.1 per cent is linked to the targets set in the budget for the year in question. The targets relating to EBITA are set annually by the Supervisory Board.
The short-term bonus allocated to ron Icke represented 62 per cent of the theoretically attainable 100 per cent in 2007 and around 43 per cent in 2008. The short-term bonus allocated to rob Zandbergen represented 89 per cent and around 57 per cent of the theoretically attain- able 100 per cent in 2007 and 2008, respectively. The above shows that the short-term bonus system sets challenging targets.
c) pension contribution. The members of the Executive Board receive a pension contribution of 20 per cent of their fixed salary, which is not subject to a maximum.
d) variable long-term bonus, unique Share plan. In 2008 the Supervisory Board decided to retain the Unique Share Plan, as approved by the Shareholders in 2005. The remuneration policy under the Unique Share Plan is set for a period of three years (2008, 2009 and 2010). The targets that need to be met will be established annu- ally by the Supervisory Board using a separate matrix. The determining factors in this matrix for calculating the number of shares to be conditionally allocated are revenue, revenue growth and targeted EBITA.
The matrix for 2008 contains a spread in revenue growth of 15% and in target EBITA of 1,5% - 2%. If the annual targets are met, the shares are conditionally allocated. If the director concerned is still employed by the com- pany after three years have elapsed, the shares are unconditionally allocated and released to them. As in the previous system, a bonus of 25 per cent is awarded if the shares allocated under this share plan after three years are held until the end of 2013 and the recipient is still employed by the company at that time. The purpose of this last provision is to emphasise director’s commit- ment to the company.
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The above results in the following proposed remuneration for the members of the Executive Board:
note to 2007 variaBle long-term BonuS under the unique Share plan. The performance criteria of the Unique Share Plan for the 2005 (pro forma), 2006 and 2007 financial years are as follows:
a) The average revenue growth of USG People N.V. over the period as a whole should be 12.5 per cent. b) The company’s EBITA at the end of 2007 should amount to not less than 6.5 per cent of revenue. c) Payment will only be made if both criteria (a and b) are met.
option rightS. Until 1 January 2005, option rights on shares of USG People N.V. were allocated to members of the Executive Board with an exercise period of five years. In 2004 ron Icke received 20,000 employee share options. The expiration date of these options was 10 May 2009. The options were converted into shares by ron Icke on 4 April 2008. The shares were not sold and were still held by ron Icke on 31 December 2008. The number of em- ployee share options yet to be exercised was therefore zero at year-end 2008.
appointment. The members of the Executive Board are appointed by the Supervisory Board. Best-practice provi- sion II.1.1. of the Corporate Governance Code (hereinafter: ‘the Code’) states that directors should be appointed for a term of four years. According to the Code, reappoint-
variable short contribution variable long-term bonus
fixed salary -term bonus to pension (uSp), conditional
r. icke 2008 670,000 285,000 134,000 8,000 shares 2007 650,000 405,000 97,000 20.000 shares r. Zandbergen 2008 502,500 285,000 100,500 6,000 shares 2007 455,000 405,000 68,000 12.000 shares
report of the Supervisory Board
ment on each occasion can be for a maximum period of four years. The General Meeting of Shareholders of 2006 approved the proposal of USG People to deviate from the Code on this point. The possibility was also left open to deviate from this provision in future cases. The grounds for doing so lie in the fact that at USG People, the members of the Executive Board often come from within the company, and long-term employment relationships with the com- pany are commonplace. By offering the members of the Executive Board a term of appointment of only four years, the company incurs the risk that potential Board members will not wish to accept the position, which would adversely affect the company’s interests. In future appointments of members of the Executive Board, the General Meeting of Shareholders will naturally be notified regarding the term of the appointment or the method of the appoint- ment as applicable.
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notice and diSmiSSal. A notice period of six months has been agreed with the members of the Executive Board. The payment on termination of the employment agreement will not exceed the amount of one year’s salary, calculated on the fixed component of the remu- neration. USG People considers it desirable to allow for the possibility of allocating an additional payment in the amount of the six-month notice period. If the maximum of the annual salary for a member of the Executive Board dismissed during the first term of their appointment is clearly unreasonable, the person becomes eligible for a termination payment of not more than twice their annual salary. No arrangement has been made regarding the early retirement of members of the Executive Board, nor have any change of power arrangements been made.
loanS. No loans have been provided to members of the Executive Board.
the SuperviSory Board. The remuneration of the chairman and members of the Supervisory Board, respectively, is set at € 50,000 and € 35,000 per year. The persons chairing the internal committees receive € 5,000 per year for the performance of their duties. Members of the internal committees receive € 3,000 per year. All members of the Supervisory Board receive an additional annual reimbursement of expenses of € 2,000. The individual remuneration of members of the Supervisory Board for 2008 was proposed and approved as follows:
No share options are held by members of the Supervisory Board, with the exception of Alex Mulder, who still holds 20,000 employee share options.
No loans, advances or related guarantees have been granted to members of the Supervisory Board.
reSignation rota. The Supervisory Board consists of five members appointed according to the following resignation rota:
The term of appointment of Joost van Heyningen Nanninga comes to an end in 2009. Joost van Heyningen Nanninga has made it known that he will gladly continue sharing his expertise in the field of personnel and organisation as a member of the Supervisory Board of USG People. The Supervisory Board is pleased that Joost van Heyningen Nanninga wishes to continue as a member of the Supervisory Board, as well as chairman of the remuneration and appointments committee. The Supervisory Board will therefore propose to the General Meeting of Shareholders in April 2009 that Joost van Heyningen Nanninga be reappointed for a period of four years.
2008 2007
Periodic remuneration
(including reimbursement of expenses)
Cor Brakel (chairman) 55,000 55,000 Christian Dumolin 42,000 42,000 Joost van Heyningen Nanninga 42,000 42,000 Marike van Lier Lels 40,000 40,000
Alex Mulder 40,000 40,000
appointed first
until appointment
Cor Brakel (chairman) 2010 1998
Christian Dumolin 2012 2006
Joost van Heyningen Nanninga 2009 2001 Marike van Lier Lels 2012 2002
9 5 in concluSion. To conclude, the Supervisory Board
wishes to stress that contacts with the Executive Board during the 2008 year under review were both open and constructive. The Supervisory Board wishes to thank the Executive Board and all USG People employees for their efforts and commitment. This year once again proved that it is people who make the difference: let’s keep the world working!
Almere, 3 March 2009
the Supervisory Board
Cor Brakel, chairman Christian Dumolin
Joost van Heyningen Nanninga Marike van Lier Lels
Alex Mulder
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Benelux Outside the Benelux
2008 2007 2006 2005 2008 2007 2006 2005 revenue x 1 billion euros 3.0 2.0 1.0 0