remuneration report United Services Group N.V.

Transcription

1 remuneration report United Services Group N.V.

2 Chapter 1: Introduction This remuneration report provides information on the remuneration policy and also comprises the remuneration statement for the members of the Executive Board and the members of the Supervisory Board of United Services Group N.V. for the financial year 2004, as prepared by the Supervisory Board. United Services Group has elected to have all members of the Supervisory Board involved with the remuneration policy. No separate remuneration committee has been formed. United Services Group attaches great importance to all members of the Supervisory Board being up to date on all relevant issues within the company. Up until the General Meeting of Shareholders on 6 May 2004 the Supervisory Board comprised six members and after that five members. As from the General Meeting of Shareholders in May 2004 the Supervisory Board comprised the following members: Drs. C.J. Brakel (chairman), Prof. Dr. M.H. Battaille de Stappens de Nieuwenhove, Drs. J.H. van Heijningen Nanninga, Ms. Ir. M.E. van Lier Lels and Prof. Dr. B. de Vries. Prof. Dr. C.N.A. Molenaar was also a member of the Supervisory Board from 1 January 2004 to 6 May Regulations The regulations of the Supervisory Board determine that the formulation of remuneration policy is part of the activities of the Supervisory Board. The regulations of the Supervisory Board may be consulted on the company website. Task The core task of the Supervisory Board in the area of remuneration includes making proposals as to the remuneration policy for members of the Executive Board. Authority for adopting the policy and all material changes thereto belongs to the General Meeting of Shareholders. Furthermore, the Supervisory Board makes proposals in regard to the remuneration of individual members of the Executive Board. In this context, the following are in any event considered: the remuneration structure, the level of the set remuneration, the granting of shares and/or options, any other variable remuneration components, pension rights, redundancy schemes and performance criteria. 2

3 Chapter 2: Remuneration policy Remuneration The Supervisory Board sets the level of remuneration for the individual members of the Executive Board. The remuneration policy is determined by the General Meeting of Shareholders. The Supervisory Board determined remuneration for 2003, 2004 and 2005 on 4 December The policy is designed to attract and secure good management for a publicly listed internationally active company in the field of flexible employment. The purpose of the remuneration is to guarantee to attract experienced executive directors who are and remain motivated, so that their performances enhance the value of United Services Group. The underlying thinking behind the remuneration policy is to realise a balanced situation between short term operating result before amortisation and the sustainable value of the United Services Group in the longer term. In regard to the last point it should be clear that the aim here is to increase shareholder value. United Services Group seeks to ensure that its remuneration policy is in line with the market. The current remuneration of the Executive Board is in proportion to the rest of the senior management of United Services Group and comprises a fixed and a variable part. The fixed part of the salary is assessed and determined on a regular basis, for a longer period, whereby account is taken of the level of experience and responsibility of the relevant members of the Executive Board. In addition to the fixed salary remuneration comprises a variable part, which is set at 2 per mille of the operating result before amortisation for the company as a whole. This short-term bonus is paid in cash and hence is related to the operating result as realised. Under the option plan in 2004 each of the two members of the Executive Board was granted 10,000 unconditional options. Furthermore, the members of the Executive Board receive a contribution to the pension provision. This contribution comprises a set percentage of the fixed salary whereby the maximum is 65,000. Remuneration in the company is designed to realise a salary level that is comparable with the reference group. In 2005 the company will consult professional and independent remuneration consultants in order to arrive at an optimal comparison. The reference data will be used to bring remuneration in line with the size of United Services Group and the responsibilities of the Executive Board. Remuneration policy 2005 Chapter 4 comprises the remuneration statement for Remuneration for 2005 is comprised as follows: Fixed Pension Variable salary contribution salary Shares A.D. Mulder 2005: 420,000 65,000 2 per mille EBITA 2,500 shares USG* R. Icke 2005: 360,00 63,000 2 per mille EBITA 2,500 shares USG* * On realisation of the performance criteria set out below the members of the Executive Board each receive 2,500 shares of USG in line with the shares plan described below. The option plan lapsed effective 1 January 2005, whereby no further remuneration in options will take place in At the General Meeting of Shareholders on 12 May 2005 a proposal will be made for the introduction of a share plan for the Executive Board to operate as from 1 January 2005 up to and including the end of This arrangement is set out in a separate share plan intended for the members of the Executive Board, i.e. the Unique Share Plan (USP). A plan of this type will have a positive effect on the company s objectives given that the interests of the shareholders and the members of the Executive Board will be parallel. Moreover, it provides insights into the performances forming the basis on which members of the Executive Board are remunerated. The plan also promotes long-term bonding of the members of the Executive Board with United Services Group and can play a role in attracting qualified future executive directors. The main lines of the share plan are as follows: 3

4 If the performance criteria set out below are met, the member of the Executive Board annually receives a net cash bonus equal in amount to 2,500 shares of United Services Group. The price here is taken as the price on the first working day with an ex-dividend quotation after the General Meeting of Shareholders. Out of this bonus the member of the Executive Board is required to purchase 2,500 shares of United Services Group and to place these in deposit. These shares may not be traded during the first three years after purchase. After three years, on realisation of targets, the member of the Executive Board receives one additional share for every share that he/she has received and retained under the Unique Share Plan. To emphasize the bonding of the member of the Executive Board with the company the share plan determines that after six years the member of the Executive Board shall receive a bonus number of shares equal to half of the number of shares that the member of the Executive Board has received and retained under this arrangement, during the first three years. After three years the Supervisory Board sets new performance criteria that will govern the share plan for the next three years. After 6 years the share plan set out above will be terminated and a new study will be made as to whether and how substance will be given to the Unique Share Plan. The following performance criteria have been set for the period 1 January 2005 up to and including the end of 2007: a) During this period turnover at United Services Group is to grow between 8 and 10% per year. b) During the same period the operating result is to increase by 0.5% and 1.5% of turnover. c) Realisation of performance criteria as set shall be measured annually and the bonus in shares shall be calculated on this basis. In exceptional cases the Supervisory Board is authorised to allow a disbursement under the Unique Share Plan, even where one of the two criteria has not been met. However, this is always conditional on there being sustainable, longer-term value creation for the company, within the concrete situation. The Supervisory Board proposes as no options will be granted to members of the Executive Board in 2005 that in 2005, at any event, a net cash bonus of 2,500 United Services Group shares should be paid to the Executive Board. Of this 2,500 shares of United Services Group must be purchased and put in deposit. As described above the balanced and transparent remuneration package that has been constructed attracts, motivates and secures loyalty. Differentiation in remuneration is comparable with other major, internationally operating Dutch companies. The various components in the package, appealing to performance by the Executive Board on the short medium and longer terms, mean that the right balance has been found between remuneration and the performance required for this; hence, the shareholder is assured, both in the short and longer term, of an Executive Board that will be optimally committed to maximising shareholder value. Appointments Members of the Executive Board are appointed by the Supervisory Board. Best practice stipulation II.1.1. introduces the so-called four-year appointment for members of executive boards. Under the Code reappointments are always for a maximum period of four years. This rule does not match with the contractual situation for members of the Executive Board currently in office. In the opinion of United Services Group this is not the right moment to alter current contracts, all the more so in that the members of the Executive Board have already been in the service of the company for many years. With future members of the Executive Board in mind, United Services Group also wishes to keep open the possibility of making appointments for longer than four years, where there is good reason. It is regularly the case at United Services Group that members of the Executive Board are drawn from its own ranks. This often entails long service records with the company. By only being able to offer members of the Executive Board the possibility of a four-year appointment, the company runs the risk of potential members declining the function for this reason. This would be to the disadvantage of the company. Hence, United Services Group is of the opinion that it has good reason to diverge from the Code on this point. Self-evidently, in the case of a 4

5 future appointment of a member, the Executive Board will make notification as to the length and/or manner of the appointment. Notice and redundancies Under the current contract for members of the Executive Board there is an agreed period of six months notice. The payment on termination of the contract of employment is a maximum of one year s salary calculated on the fixed part of the salary. Where the maximum of one annual salary for a member of the Executive Board who is dismissed in his/her first period in office is evidently unreasonable, this person shall be eligible for a redundancy payment being a maximum of twice the annual salary. No arrangement has been agreed in regard to the premature departure of members of the Executive Board. Loans No loans were made to members of the Executive Board. 5

6 Chapter 3: Remuneration statement for the year 2004 The Executive Board The individual remuneration of members of the Executive Board in 2004 was as follows: Fixed Pension Variable Total salary contribution salary Total options A.D. Mulder 2004: 360,000 63, ,000 10, : 360,000 63,000 79, ,928 4,000 R. Icke 2004: 325,000 56,875 94, ,559 10, : 325,000 56,875 79, ,803 4,000 Hence, total remuneration of the Executive Board in 2004 totalled 899,559 compared with 964,731 in The variable remuneration concerns 2 per mille of the operating result before amortisation, for the company as a whole. For the year 2004, in regard the sabbatical leave of the CEO, Mr. A.D. Mulder, it was decided to allocate the variable remuneration to the CFO, Mr. R. Icke, who also deputised in the role of CEO for a period of six months. Under the option plan a total of 20,000 unconditional options were granted (2003: 12,000) to members of the Executive Board. Option rights were granted on shares of United Services Group with an exercise period of five years. The development of current option rights granted to members of the Executive Board on shares of 1.- par in the capital of the company is as follows: Situation Situation Exercise To be end year price 2004 exercised 2003 Granted Exercised Due end (in EUR) before: A.D. Mulder ,000-6, May ,000-6, April ,000-6, April ,000-6, April ,000-4, May ,000-10, May 2009 R. Icke ,000-6, May ,000-6, April ,000-6, April ,000-6, April ,000-4, May ,000-10, May Total: 56,000 20,000 12,000 64,000 6

7 The Supervisory Board The individual remuneration of the members of the Supervisory Board who were in office during 2004 was proposed and approved as follows at the General Meeting of Shareholders on 6 May 2004: Periodic payments Drs. C.J. Brakel 34,088 34,088 Prof. Dr. M.H. Bataille 24,088 24,088 Drs. J.H. van Heijningen Nanninga 24,088 24,088 Ms. Ir. M.E. van Lier Lels 24,088 24,088 Prof. Dr. B. de Vries 24,088 24,088 Prof. Dr. C.N.A. Molenaar* 10,337 24,088 * The period in office of Prof. Dr. C.N.A. Molenaar as a member of the Supervisory Board came to an end on 6 May 2004 during the General Meeting of Shareholders. No member of the Supervisory Board is in possession of share options. No loans, advances or related guarantees have been made to members of the Executive Board or the Supervisory Board. 7