The section on the Board remuneration specifies the current remuneration for the statutory directors in 2016, their success at meeting set targets and the resulting awards of variable remuneration. The report also specifies the remuneration received by the members of the Supervisory Board. For further details on the remuneration policy click here.
Remuneration of the statutory directors
Fixed and variable remuneration
From 2016 onward the annual variable remuneration of the company’s statutory directors will be limited to 20% of fixed annual salary. To make this principle applicable for the current board members, whose variable remuneration is 25% resp. 35% of fixed annual salary, the supervisory board decided to convert – for the remainder of the relevant employment contract - the part of the variable remuneration above 20% at a rate of 60% as agreed with the shareholder. This converted part has been included in the fixed remuneration and therefore included in the pension base.
|Fixed Remuneration||Variable Remuneration (annual)||Variable Remuneration (long term)|
|(in EUR thousand)||2016 *||2015||2016||2015||2016 **||2015|
|J.M. Kroon Chief Executive Officer||355||337||57||73||n/a||n/a|
|U.T.V. Keussen Vice-chair Executive Board||351||304||49||61||n/a||30|
|B.G.M. Voorhorst Chief Operating Officer||272||257||38||51||n/a||n/a|
|O. Jager Chief Financial Officer||265||234||40||47||n/a||23|
* Including the converted part of the variable remuneration
** Not applicable anymore as per 1 January 2016
With effect from 1 January 2016 and in accordance with the indexation for employees as determined by the 'NWb' Collective Labour Agreement for grid companies, the salaries of all statutory directors have been indexed by 1.5%.
Based on achievement of present targets, the Supervisory Board decided on the statutory directors' variable payment realisation percentages over 2016. Realisation of the Safety target was 0%, due to the fatal accident which occurred in the beginning of 2016. The realised percentages are included in the table below. The Supervisory Board has concluded that there are no current insights that might lead to the revision of the variable remuneration paid out in former years.
|J.M. Kroon||U.T.V. Keussen||B.G.M. Voorhorst||O. Jager|
|Security of Supply and Safety||20.0%||45.0%||20.0%||45.0%||20.0%||45.0%||20.0%||45.0%|
|Security of Supply||20.0%||20.0%||20.0%||20.0%||20.0%||20.0%||20.0%||20.0%|
|Individual targets depending on indivual Board member's portfolio||20.0%||20.0%||15.0%||20.0%||15.0%||20.0%||20.0%||20.0%|
|Total variable remuneration realised in 2016||74.6%||69.6%||69.6%||74.6%|
|(in EUR thousand)||Pension contribution||Pension compensation||Total pension costs||Pension contribution||Pension compensation||Total pension costs|
|J.M. Kroon Chief Executive Officer||64||94||158||69||84||153|
|U.T.V. Keussen Vice-chair Executive Board||110||n/a||110||131||n/a||131|
|B.G.M. Voorhorst Chief Operating Officer||19||30||49||20||27||47|
|O. Jager Chief Financial Officer||18||22||40||19||16||35|
The pensions of all Dutch statutory directors are administered by the ABP Pension Fund. The pension accrual is based on a midpoint salary system. Besides the ABP pension, additional pension is accrued for the Chief Executive Officer to facilitate retirement at 61 years of age, under a non-contributory pension plan based on total income, agreed when he joined the company. Pension accruals considering the German income of the Dutch statutory directors based on the German activities are organised in a standard defined contribution contract with Swiss Life.
The pension entitlements of the German Vice-chair are based on the so-called Beitragsplan, a company agreement applicable for all employees of TenneT in Germany.
Based on an agreement with the Supervisory Board from 2010, the Chief Executive Officer acquired leave days in 2016 with a value of EUR 25,545 (2015: EUR 25,200).
Other allowances and secondary benefits
|Secondary benefits||Estimated value private use company car 1|
|(in EUR thousand)||2016||2015||2016||2015|
|J.M. Kroon Chief Executive Officer||8||8||3||4|
|U.T.V. Keussen Vice-chair Executive Board||–||–||5||5|
|B.G.M. Voorhorst Chief Operating Officer||6||7||7||7|
|O. Jager Chief Financial Officer||6||6||7||6|
1) Based on estimated private mileage
All statutory directors make use of a company car, the estimated value of the private use of this car is shown in the above table. In addition, with respect to the private use of leased vehicles, the customary addition to taxable income is applicable for personal income tax purposes. The company does not reimburse its directors for any personal income tax consequence resulting from the private use of leased cars.
In light of Mr Jager being temporarily stationed in Germany, a number of associated costs are reimbursed, including travel costs, housing costs, school fees, and an allowance has been allocated in accordance with the company's expat policy. These reimbursements do not contain a remuneration component.
Each statutory director receives a monthly allowance for necessary business expenses, with a value of EUR 3,300 per year. This monthly allowance is not included in the table as it is a compensation of costs and not a remuneration component.
For the Dutch statutory directors the secondary benefits as reflected in the above table contain the 'NWb' Collective Labour Agreement for grid companies based contribution to the life-course savings scheme, a contribution to health insurance and a budget for flexible terms of employment. There are no comparable Tarifvertrag based secondary benefits or allowances for the German statutory director.
The total remuneration paid to the statutory directors reconciles to and is further disclosed in the notes to the consolidated financial statements.
Remuneration of the Supervisory Board
The remuneration policy for the Supervisory Board defines the remuneration for the different roles and committees of the Supervisory Board. Each Supervisory Board member is either a member or chair of one or two committees. To establish a link between the Supervisory Board and the Aufsichtsrat of TenneT TSO GmbH, one of the members of the Supervisory Board is also a member of the Aufsichtsrat.
The responsibilities within the committees are as follows:
|Supervisory Board||Audit, Risk and Compliance Committee||Remuneration and Appointments Committee||Strategic Investments Committee||Aufsichtsrat TenneT TSO GmbH|
The shareholder decided to introduce an annual indexation of the Supervisory Board remuneration following the 'NWb' Collective Labour Agreement for grid companies, as of 1 January 2015. The Supervisory Board remuneration has been retrospectively increased by 1.2% in 2015 and 1.5% in 2016. The remuneration was as follows in 2016:
|Audit, Risk and Compliance Committee||6,656||per annum|
|Remuneration and Appointments Committee||5,264||per annum|
|Strategic Investments Committee||5,264||per annum|
|Aufsichtsrat TenneT TSO GmbH||5,500||per annum|
The total remuneration received by members of the Supervisory Board in 2016 was as follows:
|Fixed remuneration||Committee fee||Total remuneration|
|(in EUR thousand)||2016||2015||2016||2015||2016||2015|
|L.J. Griffith as of 1 July 2015||20||10||5||3||25||13|