Remuneration report

Remuneration policy for the Management Board

General

The current remuneration policy was adopted by the General Meeting of Shareholders in April 2006 and was last amended in June 2023 (following a previous amendment in April 2023). In view of the major investment task, Alliander’s size and growth, and the ever-increasing (regional) complexity of the task, the remuneration policy has been modified in three respects. This is in line with the implementation policy already adopted by the Supervisory Board and appropriate to Alliander’s public character. First, the possibility of variable compensation was dropped. Second, the members of the Management Board are appointed for an indefinite period and third, the remuneration limit is now set at a maximum of 130% of the WNT limit. The aim of the remuneration policy is to create conditions that allow the company to attract, motivate and retain capable directors in order to achieve its task in the context of the energy transition. Each year, the remuneration policy is updated by the Supervisory Board in the implementation policy. The implementation policy is reviewed in the process and, if necessary, adapted to fit amended regulations, social trends and labour market developments.

The Supervisory Board is responsible for the implementation of the adopted remuneration policy for the Management Board. The Selection, Appointment and Remuneration Committee discusses the implementation of the remuneration policy with the Committee of Shareholders every year. The Public and Semi-Public Sector Executives Pay (Standards) Act (WNT), which sets limits for the remuneration of senior executives within the public and semi-public sector, is not applicable to Alliander. However, the Supervisory Board is acutely aware of the evolving perceptions within society regarding remuneration in the public and semi-public sector. Against this background, the Supervisory Board finds the amount of the amended remuneration policy acceptable. It is expected that this level of remuneration will be sufficient to maintain the quality of the company’s management, which is of vital importance in the light of the radical changes that Alliander faces in the future. 

The WNT is applicable to network operator Liander N.V. The members of Alliander’s Management Board are also responsible for the business and operational management of Liander. In this latter capacity, the members of the Management Board qualify as senior executives of Liander under the WNT. In view of this, the remuneration package for Liander is subject to a statutory pay cap.

Procedure

The Supervisory Board draws up the remuneration policy for the members of the Management Board, based on advice from the Selection, Appointment and Remuneration Committee. The General Meeting of Shareholders of Alliander adopts the remuneration policy. Within the set remuneration policy, the Supervisory Board, again acting on the advice of the Selection, Appointment and Remuneration Committee, sets the actual remuneration package for each individual Management Board member.

Remuneration components

The total remuneration package for the Management Board members for 2023 consists of the following components:

• Annual gross base salary

• Pension benefits

• Social security contributions and other benefits

Re 1. Annual gross base salary

Management Board members receive an annual gross base salary, including holiday allowance. The fixed gross annual salary of the members of the Management Board does not exceed 130% of the WNT limit. The fixed gross annual salary is adjusted annually to the current WNT remuneration limit.

Re 2. Pension benefits

Management Board members participate in the pension scheme of Stichting Pensioenfonds ABP as referred to in the collective labour agreement for network companies and applicable to all employees of Alliander. Since 1 January 2004, this has consisted entirely of an average-pay scheme. Management Board members pay an individual contribution to participate in the pension scheme. Effective from 1 January 2015, the maximum pensionable salary has been equal to the permitted maximum under tax rules (€128,810 for 2023). This implies that no further pension is accrued over the part of the salary that exceeds €128,810.

Re 3. Social security contributions and other benefits

In addition to the social security contributions that are normally paid by the company, Management Board members are entitled to an employer’s contribution towards the premium for the group health insurance plan, contributions to the ‘personal budget’ scheme and the use of a car provided by the company. In addition, the company has arranged accident and liability insurance for the benefit of the Management Board members. The company does not provide loans, advances or guarantees to members of the Management Board.

A restrictive policy is in place for positions outside the company: the Supervisory Board must approve any supervisory board membership or other paid position, including positions of an advisory or supervisory nature, while other positions outside the company must be reported in advance to the Supervisory Board. A Management Board member cannot hold more than two supervisory positions in large Dutch companies or large foundations. In addition, a Management Board member cannot be the chair of a supervisory body of a large Dutch company or large foundation. Any remuneration received for other positions held pursuant to membership of Alliander’s Management Board accrues wholly to the company. Remuneration for other positions not held pursuant to membership of Alliander’s Management Board accrues to the Management Board member concerned, who is also liable for any tax consequences.

Other principles

Term of service

All members of the Management Board are employed by Alliander N.V. on the basis of an indefinite contract of employment.

Notice period and severance policy

Notice periods of three months for the Management Board members and six months for the company have been agreed with the Management Board members. If the company terminates a Management Board member’s employment contract, other than for a compelling reason, it is company policy to award a severance payment of no more than one gross annual salary.

Implementation of the Management Board remuneration policy in 2023

General

With the change in the composition of the Management Board in 2019, it has been decided to set the remuneration of the various members of the Management Board at the same level, This emphasises the non-hierarchical nature of the management model. Although the total remuneration package of the members of the Management Board is set at a maximum of 130% of the WNT standard¹, there may be differences in salary levels. These differences arise through individual options with regard to fringe benefits, such as the use of a car provided by the company.²

• 1The WNT standard for 2023 is €223,000.
• 2The remuneration data under Re 1., Re 2. and Re 3. were prepared on the basis of the IFRS accounting principles for the financial statements and not according to the definition of the WNT. As a result, although the maximum remuneration of 130% of the WTN standard is met, the total remuneration per individual based on the IFRS principles may deviate from this.

Re 1. Annual gross base salary

In the 2023 calendar year, Mr Otto’s base salary amounted to €260,000, including 8% holiday allowance. Mr Bien’s base salary amounted to €240,000, including 8% holiday allowance. The base salary paid to Ms Visser amounted to €250,000, including 8% holiday allowance, while Mr Schut’s base salary amounted to €246,000, also including 8% holiday allowance.

Re 2. Pension benefits

Pension costs relate to standard pension contributions, which are based on the annual gross base pensionable salary, up to the permitted maximum of €128,810 under tax rules. In the year under review, €23,000 was paid in pension contributions per member of the Management Board.

Re 3. Social security contributions and other benefits

In 2023, the total amount of social security contributions, the employer’s contribution towards the premium for the health insurance plan, and contributions to the personal employee benefits budget amounted to €16,000 for Mr Bien and €17,000 for Mr Otto, Mr Schut and Ms Visser.

Remuneration ratios

The median of the remuneration of all employees of Alliander set against the remuneration of the chair of the Management Board results in the following remuneration ratios:

Principles:

• The calculation for both the chair of the Management Board and the employees was based on the following elements: base remuneration, employer’s contribution towards pension, social security contributions and other applicable remuneration elements.

• Both full-time and part-time employees were included in the calculation.

Remuneration policy for the Supervisory Board

The remuneration of the Supervisory Board members is fixed and not dependent on the company’s results. The remuneration was adopted by the General Meeting of Shareholders in 2011 and consists of a fixed annual gross amount for the chair and a fixed annual gross amount for the other members. The remunerations are adjusted yearly in line with the wage developments under the collective labour agreement for network companies. The members of the Supervisory Board are also entitled to an expense allowance. Alliander does not provide any personal loans, guarantees and so forth to the members of its Supervisory Board. Directors’ liability insurance has been taken out for the members of the Supervisory Board.

Pursuant to the WNT, the members of Alliander’s Supervisory Board also qualify as senior executives of Liander. The remuneration of the Supervisory Board for its supervisory activities in respect of Alliander is equal to the maximum remuneration for supervisory work for Liander, although this is not required by law. Under the WNT, the maximum remuneration of the Supervisory Board chair and the Supervisory Board members is 15% and 10% respectively of the maximum WNT limit applicable to Liander. The Supervisory Board continues to discuss with the shareholders an appropriate remuneration for the supervisory activities in line with the size of investments, risks and social relevance of the company, and the corresponding requirements in respect of quality and time investment by the Supervisory Board members in exercising adequate, good and focused supervision. For an overview of the total remuneration awarded to the members of the Supervisory Board for 2023, see the notes to the consolidated financial statements.

WNT

Alliander is not governed by the Public and Semi-Public Sector Executives Pay (Standards) Act (WNT), but network operator Liander is. The WNT requires companies to report on the remuneration of current and former senior executives. The annual report of the network operator, which is to be published in the second quarter of 2024, will contain disclosures on the WNT requirements.