29. Management Board and other identified staff remuneration
With regard to remuneration, Vesteda is in compliance with the Dutch Financial Supervision Act (FSA) provision on the remuneration of Identified Staff. The Management Board together with the Management Team members are considered Identified Staff, as well as the Compliance Officer and the Internal Audit Manager. Amounts in this paragraph are in €.
The table below provides an overview of the total remuneration of the Management Board and other Identified Staff in 2022 and 2021. The remuneration is divided into three components: base salary, variable bonus, social security charges & pension contributions and for 2022 a compensation for income tax on capital repayments 2018 and 2019. The Compliance Officer and the Internal Audit Manager do not receive a variable remuneration.
Other Identified Staff*
Charged to the company in 2022 (accrual basis)
Base salary charges
Variable remuneration charges 2022 (for future cash or shares)
Compensation income tax capital repayments 2018 and 2019
Social security charges & pension contributions
Total charged to the company in 2022
*Other identified staff as per 31-12-2022
#Phantom shares granted before 2021
#phantom shares granted in 2021
#phantom shares cashed in 2021
#phantom shares granted end of 2021
#phantom shares granted in 2022
#phantom shares cashed in 2022
#phantom shares granted end of 2022
#Phantom shares not locked up end of 2022
#Phantom shares locked up until May 2023
#Phantom shares locked up until May 2024
#Phantom shares locked up until May 2025
#Phantom shares locked up until May 2026
Phantom share value as per 31.12.2022
In 2022, the company was charged €903,000 (2021: €961,000) for the remuneration of the Management Board, consisting of €746,000 base salary (2021: €710,000) and €0 variable renumeration (2021: €170,000). In addition, social security charges and pension contributions amounted to €84,000 in 2022 (2021: €81,000) for the Management Board. In 2022 a compensation for income tax on capital repayments 2018 and 2019 for the Management Board amounts to €73,000 (2021: €0).
Compensation for income tax capital repayments 2018 and 2019
In 2018 and in 2019, Vesteda redeemed and paid out to participants a total of €13.89 per participation right related to the proceeds of two residential portfolio sales (in total €425.5 million). Under the phantom share programme these capital repayments, reducing the net asset value of the phantom shares, were subject to income taxes. As the alignment of the interests of the Management Board and the Participants is an important objective of the Remuneration policy and the Phantom Share Plan, the Supervisory Committee is of the opinion that the income taxes paid by the Management Board related to the capital repayments were at odds with the interests of the Participants. The Supervisory Committee therefore determined in 2022 that the Management Board would be compensated for the income taxes paid on these two specific capital repayments, after careful review and extensive consultation with our tax advisors and the tax authorities. The taxation of the Phantom Shares of the Participants remained unchanged.
Variable remuneration charges
As determined by the Supervisory Committee, the Management Board and the Management Team members achieved on average a score of 67% of the ‘maximum’ targets in 2022 (2021: 71%). However, in accordance with Vesteda’s remuneration policy, the Management Board and the Management Team members are not entitled to receive any variable remuneration in case the net result of Vesteda is negative.
As the result after tax of Vesteda in 2022 is negative (-/- €12 million) the Management Board and the Management Team members received no variable remuneration over 2022.
As per year end 2022, one phantom share represents a value of €210.98 (based on INREV NAV, excluding distribution to be paid for 2022).
The variable bonus scheme for Identified Staff was designed in compliance with the relevant provisions of the Dutch Financial Supervision Act (FSA).
The aforementioned variable remuneration entitles:
The CEO to 26.6% of base salary for ‘on-target’ performance, with a maximum of 40%;
The CFO to 20% of base salary for ‘on-target’ performance, with a maximum of 30%;
The CIO and COO to 20% of base salary for ‘on-target’ performance, with a maximum of 30%;
The HR Director to 8% of base salary for ‘on-target’ performance, with a maximum of 12%.
The bonus component is paid based on the achievement of preset qualitative and quantitative goals related to the strategic objectives in the business plan, which are set and evaluated by the remuneration committee of the Supervisory Committee. The bonus remuneration is divided into a 60% direct and a 40% indirect (deferred) component. Both the direct component and the deferred component are paid out half in so-called phantom shares and half in cash.
The direct component is paid immediately after the one-year performance period, and an indirect, deferred component is paid out or received after a period of three years. The direct phantom share component and the indirect phantom share component are subject to an appropriate retention policy which is aimed at balancing financial rewards with the company’s long-term interests.
To achieve an even stronger commitment on the part of the management to the strategy and the business of the Fund, Identified Staff are entitled to exchange the cash component for phantom shares.
The variable remuneration policy for Identified Staff also includes clawback provisions. Up and until 2022 these provisions have not been applicable.