DCSIMG

DSM's Managing Board

   

The DSM Managing Board is responsible for the company's strategy, portfolio policy, the deployment of human and capital resources, the company’s risk management system and the company's financial performance.
DSM's Managing Board (left to right - Stefan Doboczky, Dimitri de Vreeze, Feike Sijbesma (CEO), Geraldine Matchett (CFO), Stephan Tanda)

Setting and achieving our goals

The Managing Board consists of three or more members to be determined by the Supervisory Board. Since 2005, members of the Managing Board have been appointed for a maximum period of four years.

The members of the Managing Board are collectively responsible for the management of the company. Notwithstanding their collective responsibility within the Managing Board, certain tasks and responsibilities for business clusters, functional areas and regional responsibilities have been assigned to individual members.

The remuneration of the members of the Managing Board is determined by the Supervisory Board based on the remuneration policy approved by the General Meeting of Shareholders.

The functioning of and decision-making within the Managing Board are governed by the Regulations of the Managing Board, which have been drawn up in line with the Dutch corporate governance code and can be found on this website.

The members of the Managing Board are:

Feike Sijbesma

Feike Sijbesma, Member of the Board since July 2000; Chairman since May 2007.


Stephan Tanda

Stephan B. Tanda, Member of the Board since May 2007. End of current term: 2015.


Stefan Doboczky

Stefan Doboczky, Member of the Board since May 2011. End of current term: 2015.


Dimitri de Vreeze

Dimitri de Vreeze, Member of the Board since September 2013. End of current term: 2017.


Geraldine Matchett

Geraldine Matchett, Member of the Board as of 1 August 2014 and Chief Financial Officer as of 1 December 2014. End of current term: 2018.


DSM operates in a competitive international industry and so closely monitors industry and company-specific international developments with respect to its Managing Board remuneration. Regarding Supervisory Board remuneration, DSM adheres to the principles of good corporate governance.

Managing Board remuneration in 2013

As part of its remuneration policy for the Managing Board, DSM benchmarks its remuneration package against the packages offered by the labor-market peer group once every three years. Benchmarking of the Managing Board remuneration policy was conducted in Q1 2011 and clearly showed that the remuneration of the members of the Managing Board, particularly the variable part, was well below the median at target level of the peer group.

Base salary in 2013

In view of the above-mentioned market comparison and given the fact that the last salary increase dated from July 2011, the base salaries of the Managing Board members were increased with effect from 1 July 2013:

  • CEO: from €840,000 to €855,000 (+1.8%).
  • Other Managing Board members: from €545,000 to €560,000 (+2.8%).

Short-Term Incentives (STI) for 2013

STI targets are revised annually so as to ensure that they are stretching but realistic. Considerations regarding the performance targets are influenced by the operational and strategic course taken by the company and are directly linked to the company’s ambitions. The targets are determined at the beginning of the year for each Board member.

Target STI level and pay-out

When they achieve all their targets, Managing Board members receive an incentive of 50% of their annual base salary. Outstanding performance can increase the STI level to 100% of the annual base salary.

The Short-Term Incentives have been earned on the basis of results achieved in 2013. These Short-Term Incentives will be paid out in 2014.

The Supervisory Board has established the extent to which the targets for 2013 were achieved. The realization of the 2013 financial STI targets has been reviewed by EY. Furthermore, EY has reviewed the process with respect to the target realization of the non-financial STI targets. The average realization percentage was 55.5% of base salary.

Performance shares in 2013

Performance shares were granted to the Managing Board on 7 May 2013. The following table shows the number of performance shares granted to the individual Board members:

Number of stock incentives granted 2013 Performance shares 2012
Feike Sijbesma 24,000 31,000
Stefan Doboczky 16,000 20,000
Nico Gerardu 16,000 20,000
Rolf-Dieter Schwalb 16,000 20,000
Stephan Tanda 16,000 20,000

For an overview of all granted and vested stock options and performance shares see Overview of stock options and Overview of performance shares.

Revision and claw-back of bonuses

In 2013 no revision or claw-back of bonuses occurred.

Pensions in 2013

The members of the Managing Board are participants in the Dutch pension fund Stichting Pensioenfonds DSM Nederland (PDN). PDN operates similar pension plans for various DSM companies. The pension scheme for the Managing Board is equal to the pension scheme for the employees of DSM Executive Services B.V. and DSM employees in the Netherlands.

A new pension plan for DSM in the Netherlands has been agreed with labor unions with effect from 1 January 2011. The plan, which also applies to the Managing Board, comprises the following elements:

  • Career-average pay plan, with annual accrual of pension rights (old-age pension) over base salary exceeding €13,227 (reviewed annually) at a rate of 2%.
  • Retirement age 66 years for accrual from 2012 onwards. Until 2011 the accrual was linked to a pensionable age of 65 years.
  • The scheme includes a partner pension as well as a disability pension.
  • Employee's contribution of 3.5% of base salary up to €59,235 and 7.5% of pensionable salary above this amount (reviewed annually).
  • Collective defined contribution: indexation of pensions and pension rights, depending on PDN's coverage ratio.
  • For participants who started participating before 2006, transitional arrangements related to the plan changes in 2006 apply as described in previous annual reports.

Purchasing shares

All members of the Managing Board have purchased shares in the company to emphasize their confidence in the strategy and the company. At 31 December 2013 the members of the Managing Board together held 147,296 shares in Koninklijke DSM N.V., compared to 139,012 at 31 December 2012. These shares were bought through private transactions with private funds, and obtained through vested performance shares.

Total remuneration

The remuneration and related costs of the Managing Board (including pension costs and costs relating to the Dutch ‘crisis levy’ of 16% imposed on employers for salary and bonus payments made in the year to employees whose salary exceeded €150,000) amounted to €9.6 million in 2013 (2012: €6.6 million). The increase was mainly caused by costs in relation to the early retirement of Mr. Gerardu to facilitate succession planning for the Managing Board and the Dutch crisis levy.

Overview of remuneration awarded to the Managing Board in 2013

The tables below show the remuneration awarded to the Managing Board in 2013.

Fixed annual salary in € 1 July 2013 1 July 2012
Feike Sijbesma 855,000 840,000
Stefan Doboczky 560,000 545,000
Nico Gerardu1 560,000 545,000
Rolf-Dieter Schwalb 560,000 545,000
Stephan Tanda 560,000 545,000
Dimitri de Vreeze2 492,500 -

1 Retired as of 1 September 2013
2 Board Member as of 1 September 2013

Short-term
incentives in €
20131 20122
Feike Sijbesma 480,938 231,000
Stefan Doboczky 315,000 117,175
Nico Gerardu3 309,400 128,075
Rolf-Dieter Schwalb 315,000 138,975
Stephan Tanda 298,200 163,500
Dimitri de Vreeze4 90,719 -

1 Based on results achieved in 2013 and therefore payable in 2014
2 Based on results achieved in 2012 and therefore payable in 2013
3 Retired as of 1 September 2013
4 Board Member as of 1 September 2013

Pensions

  Pension costs (employer) Accrued pension1
in € 2013 2012
Feike Sijbesma 124,123 124,123
Stefan Doboczky 81,394 81,348
Nico Gerardu2 137,394 81,348
Rolf-Dieter Schwalb 81,394 81,348
Stephan Tanda 81,394 81,348
Dimitri de Vreeze3 17,240 -

1 Pensions built up in the Dutch Pension Plan. The accrual is linked to a retirement age of 66 years.
2 Retired as of 1 September 2013
3 Board Member as of 1 September 2013

Long-Term Incentives (LTI)

For 2014, the number of conditionally granted ordinary shares under the LTI program will be:

  • Chairman 24,000
  • Members 16,000

Loans

DSM did not provide any loans to members of the Managing Board in 2013.

Adjustments to remuneration policy Managing Board in 2014

For 2014 no other adjustments will be implemented except the introduction of the face value calculation method for the 2014 grant of performance shares.

The objective of DSM’s remuneration policy is to attract, motivate and retain qualified and expert individuals that the company needs in order to achieve its strategic and operational objectives, whilst acknowledging the societal context around remuneration and recognizing the interests of DSM's stakeholders.

The following elements are taken into consideration:

  • The remuneration policy reflects a balance between the interests of DSM’s main stakeholders as well as a balance between the company’s short-term and long-term strategy. As a result, the structure of the remuneration package for the Managing Board is designed to balance short-term operational performance with the medium and long-term objective of creating sustainable value within the company, while taking into account the interests of its stakeholders. DSM strives for a high performance in the field of sustainability and aims to maintain a good balance between economic gain, respect for people and concern for the environment in line with the DSM values and business principles as reflected in the DSM Code of Business Conduct.
  • To ensure that highly skilled and qualified senior executives can be attracted and retained, DSM aims for a total remuneration level that is comparable to levels provided by other (Dutch and European) multinational companies that are similar to DSM in terms of size and complexity.
  • The remuneration policies for the members of the Managing Board and for other senior executives of DSM are aligned.
  • In designing and setting the levels of remuneration for the Managing Board, the Supervisory Board also takes into account the relevant statutory provisions and provisions of the Dutch corporate governance code, societal and market trends and the interests of stakeholders.
  • DSM’s policy is to offer the Managing Board a total direct compensation approaching the median of the labor-market peer group.

Adjustments to remuneration policy for the Managing Board

During 2011 and 2012 the Royal DSM Supervisory Board and its Remuneration Committee discussed and evaluated a number of adjustments to the remuneration policy for the Managing Board, supported by an external global reward consultancy firm and by DSM’s Corporate Human Resources department.

During 2013 the Remuneration Committee discussed and further fine-tuned the adjustments, also based on the input of a number of external stakeholders. After due consideration, the Supervisory Board proposed to the Annual General Meeting of Shareholders to make a number of adjustments to the current remuneration policy for the Managing Board. These proposals were approved by the AGM on 3 May 2013.

The adjustments do not change the overall remuneration model (philosophy) for the Managing Board.

This model is based on providing fair compensation approaching the median, and consists of a base salary and a well-balanced mix of Short-Term and Long-Term Incentives.

Both the Short-Term Incentive (STI) and the Long-Term Incentive (LTI) consist of two equal parts, one of which is linked to financial targets and the other to sustainability and – for STI only – individual targets.

The aim of the adjustments is:

  • to align the remuneration policy even more with long-term stakeholder interests, in line with DSM's stated philosophy of creating long-term value for all stakeholders;
  • to update the policy in line with the most recent prevalent market practices and benchmarks for executive and board compensation; and
  • to further strengthen pay for multi-dimensional, people-planet-profit driven performance within DSM.

Full details of the remuneration policy for the Managing Board and the Supervisory Board can be found in the Integrated Annual Report 2013.

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