Opmaak JV 05 eng.indd

Remuneration reportThe Executive BoardThe remuneration policy applying to membersof the Executive Board requires theapproval of the Annual General Meeting ofShareholders. The policy seeks to providedirectors with a remuneration package thatallows the company to recruit and retainexecutive directors of appropriate qualityand ability. Each year, the Supervisory Boardreassesses the remuneration of ExecutiveBoard members against current marketnorms. The arrangements are also scrutinizedby Hay Management Consultantsonce every three years, the most recentassessment having taken place during theyear under review. Further to this assessment,the principle on which the remunerationstructure is based has been changedfrom ‘median -5%’ to ‘Q1’. This is consideredmore in keeping with the remunerationpackage recommended for companies inthe services sector. The executive directors’fixed salary was then found to be approximately25% below the recommended level.An account of the fixed salary, variableemoluments and pension contributionsmade by or on behalf of the members ofthe Executive Board is given on page 53.During the year under review, no extraordinarypayment was made to any companyofficer or former officer.Fixed salary The executive directors’ fixedsalary will be increased in two phases (2005and 2006) to bring it to the recommendedlevel identified by the independent review.This increase does not include any compensationfor inflation. Executive directors’ salarieswill be reviewed once again in 2007.Variable emoluments Variable emolumentsare directly related to performance, and tothe targets established annually by the SupervisoryBoard:• The achievement of the profit (margin)target during the accounting year• Development and attainment of strategicobjectives• Implementation and compliance withthe corporate integrity system• Attainment of personal targets.This system provides a balanced combinationof short-term and longer-term objectives(the attainment of which can be38 Remuneration reportmeasured relatively easily), representing anadequate incentive to performance.To establish whether the targets haveindeed been met, the Supervisory Boardexamines the results achieved (against thefinancial targets), the proposed strategyand the measures taken to implement thatstrategy. The targets are based in part onthe results and objectives of comparablefirms such as Arcadis, Grontmij, Royal Haskoningand Witteveen+Bos. The ratio of thevariable remuneration component to thefixed salary is 1:4. The Supervisory Boardprefers a relatively modest variable remunerationcomponent, believing that thissufficiently ensures the loyalty of ExecutiveBoard members, both to DHV and to its corporateobjectives.An increase from 25% to 35% has beenagreed for 2006. In view of the disappointingresults for 2005, no variable emolumentis to be paid with respect to the yearunder review.Pension The pension scheme for ExecutiveBoard members is identical to that for allother employees. The pensionable age is65, with early retirement permitted fromthe age of 56. The current President of theExecutive Board is subject to the arrangementspreviously stated in the company’sstatutes, whereby he is required to stepdown from the Executive Board on reachingthe age of 60. Under the Legal StatusRegulation which applies to all employees,the company pays 71% of the pension contributionsfor Executive Board members(from 1 January 2006).Secondary conditions of employment Withregard to secondary conditions of employment,the company generally follows theGeneral Conditions of Employment forthe highest job grades within DHV, plus aslightly higher fixed expenses allowanceand a more expensive company car (whichdoes not require any contribution on thepart of the employee).Under the DHV employee participationscheme, an Executive Board member mayacquire 1,000 depositary receipts for sharesin DHV Holding B.V. A personal loan notexceeding € 4,600 may be extended tofinance such acquisition. The companydoes not provide any other personal loans,advances or guarantees to Executive Boardmembers. The conditions applying to anexecutive director’s acquisition of sharesor share certificates in DHV Holding B.V.remained unaltered in 2005.Contracts with executive directors ExecutiveBoard members appointed since 9December 2003 hold contracts for a termof four years. In the event of dismissal,these contracts provide for a severancepayment in the amount of one year’s fixedsalary and the average of the variableemoluments. The current President of theExecutive Board was appointed prior to 9December 2003. His contract is thereforewithout limit of time and provides for aseverance payment linked to the numberof years of service. These arrangements arein line with the national employment legislationin place at the time of the appointment.Any premature termination of thecontract of employment is subject to sixmonths’ notice on the part of the employerand three months’ notice on the part of theBoard member.The Supervisory BoardThe amount of the remuneration payableto members of the Supervisory Board isestablished by the Annual General Meetingof Shareholders and is not related tothe results attained by DHV. Supervisorydirectors are not eligible to aquire sharesor depositary receipts in DHV Holding B.V.,and DHV does not extend personal loans,guarantees or similar financial instrumentsto the directors.The remuneration paid to the Supervisorydirectors is also subject to a three-yearlyreview by Hay Management Consultants,based on a comparison with the remunerationoffered by organizations of a similarsize (the median principle). The most recentreview was conducted in 2005. As a result,the remuneration payable to the Chairmanof the Supervisory Board and to the membersof the Audit Committee was increasedby 8%. That payable to other members ofthe Supervisory Board remained unaltered.A full account of the payments made tothe individual members of the SupervisoryBoard in 2005 is given on page 53.