Heerlen, NL, 09 Mar 2009 21:15 CET
Royal DSM N.V., the global Life Sciences and Materials Sciences company headquartered in the Netherlands, announces today that its Managing Board and Supervisory Board have decided to withdraw a proposal to the Annual General Meeting of Shareholders (AGM) to change the Total Shareholder Return vesting scheme for stock options and performance shares (stock incentives).
Shareholders commented at the AGM of 2008 that the TSR vesting scheme allows pay-out (“vesting”) of stock incentives for below median performance versus DSM peers. A sharper scheme was suggested. The Supervisory Board reviewed the TSR vesting scheme and submitted a proposal to the upcoming AGM (March 25, 2009) that no longer allows vesting below median performance versus DSM peers, while introducing more upward vesting potential in case of outstanding performance versus peers. In this new proposed TSR vesting scheme the total value of the stock incentives would remain the same as before.
In light of the current public discussion and in particular because DSM wants to take away the perception that the Managing Board of DSM will receive substantially higher compensation for its performance in future, it has been decided to withdraw this proposal from the agenda of the upcoming AGM and as a consequence leave the existing TSR vesting scheme in place for the time being. DSM recognizes that in the context of the current economic circumstances prudence regarding remuneration policies is justified, although the actual total value of the DSM stock incentives plan is at this point already substantially lower than the median of peers in the industry and AEX.
DSM will separately contact its shareholders in the coming period to explain the considerations behind this withdrawal.
DSM strives for high performance in the area of sustainability and aims to maintain a good balance between shareholder value, respect for people and concern for the environment in accordance with the DSM corporate values. DSM will further align its remuneration policy for the Managing Board building upon the corporate values and reflecting the right balance between the interests of DSM’s main stakeholders. Changes will also be made in order to comply with the amended Dutch Corporate Governance Code. In the above context DSM will propose a revised remuneration policy for the Managing Board to the AGM in 2010, including a new TSR vesting scheme for stock incentives.
As already announced the 2009 base salaries of the Managing Board will not be increased.