Governance statement
TNT applies the principles and best practice provisions of the Dutch corporate governance code published in December 2003 including the good practice recommendations published by the Corporate Governance Code Monitoring Committee (the Frijns Committee) in its subsequent reports until December 2008, except for the following best practice provisions and recommendations below that are not fully applied:
- provision II.2.7 Dutch corporate governance code states that the remuneration in the event of dismissal of members of the Board of Management may not exceed one year’s salary (the “fixed” remuneration component). In case one year is manifestly unreasonable, the maximum of severance pay may not exceed twice the annual salary.
- severance payments other than related to a change of control for members of the Board of Management are one year base salary or a maximum of two year’s base salary in the first four-year term if one year is considered to be unreasonable. The employment contract of TNT’s CFO effective 1 April 2006 states that the severance payment other than related to a change of control will amount to twenty-four months base salary during the first four year term as a member of the Board of Management. During further terms as a member of the Board of Management, his severance payment amounts to twelve months base salary. As stated in chapter 8 of the Annual Report 2008, contracts prior to 2004 remain unaltered.
- For members of the Board of Management who are not residents of the Netherlands, TNT follows local market practice for that part of the base salary earned in the country of residence. This is done to ensure that TNT can offer a competitive package to foreign members of the Board of Management commensurate with local practice.
- severance payments in case of a change in control equal the sum of the last annual base salary and pension contribution plus the average bonus received over the last three years, multiplied by two. No distinction is made between resident or non-resident members of the Board of Management. TNT is of the opinion that such payment is realistic taking into account the special position of members of the Board of Management in a change in control situation. Also, the Supervisory Board may decide that the performance shares vest in whole or in part.
- provision III.3.4 Dutch corporate governance code states that the maximum number of supervisory board positions held by members of the Supervisory Board with Dutch listed companies cannot exceed five (whereby a chairmanship counts twice).From 1 January 2008 until 1 January 2009 TNT’s chairman of the Supervisory Board, Mr Hommen, held more than five board memberships. This situation was remedied when Mr. Hommen stepped down as chairman on 31 December 2008. See chapter 9 of the Annual Report 2008.
- provision II.2.10(e) Dutch corporate governance code states that the remuneration overview shall in any event contain a description of the performance criteria on which the performance related component of the variable compensation is dependent. TNT discloses the nature of the performance targets but not the actual targets in the sense that TNT has opted to use performance targets aligning the remuneration of the Board of Management with the business performance. As a result the targets are so specific that they contain competition-sensitive information, and are therefore not disclosed. See further chapter 8 under current remuneration policy of the Annual Report 2008.
In the Annual Report 2008, TNT explains why it deviates from these best practice provisions and recommendations. Material future (corporate) developments might justify further deviances from the Dutch corporate governance code at the moment of occurrence.
Each substantial change in the corporate governance structure of the company and in the compliance of the company with the Dutch corporate governance code shall be submitted to the general meeting of shareholders for discussion.