28 Managing Board and other identified staff remuneration

With regard to remuneration Vesteda is in compliance with the Financial Supervision Act (WfT) regulation on remuneration of Identified Staff. The Managing Board together with the Management Team members are identified as Identified Staff, including three risk/compliance members (the HR Manager, the Compliance Officer and the Internal Auditor).

In 2017 the company was charged €850,000 (2016: €972,000) for the remuneration of the Managing Board.

In addition social security charges and pension contributions were €64,000 (2016: €70,000) for the Managing Board.

The 2017 remuneration charges below include reservations for variable remuneration over 2017 to be awarded in 2018. The variable remuneration to be rewarded will partly have a deferred component. After approval of the annual accounts 2017, the Supervisory Committee will grant the target rewards for the Managing Board for the year 2017.

 

Managing Board

Other Identified Staff*

Charged to the company in 2017 (accrual basis)

  

Base salary charges

658,000

880,000

Variable remuneration charges 2017 (for future cash or shares)

192,000

164,000

Social security charges & pension contributions

64,000

165,000

Total charged to the company in 2017

914,000

1,209,000

   
   

*Other identified staff as per 31.12.2017

  
   

# phantom shares granted before 2016

1,824

553

# phantom shares granted in 2016

810

766

# phantom shares cashed in 2016

0

241

# phantom shares granted end of 2016

2,634

1,078

# phantom shares granted in 2017

1,146

1,086

# phantom shares cashed in 2017

0

299

# phantom shares granted end of 2017

3,780

1,865

# phantom shares not locked up end of 2017

1,580

406

# phantom shares locked up until May 2018

688

435

# phantom shares locked up until May 2019

730

260

# phantom shares locked up until May 2020

324

306

# phantom shares locked up until May 2021

458

458

As per year end 2017 one phantom share represents a value of €131.83 (based on INREV NAV excluding to be paid distribution of 2017).

The variable bonus scheme for Identified Staff is designed in compliance with the WfT regulation.

In principle the bonus scheme for Identified Staff entitles the CEO to 26.6% of base salary for ‘on target’ performances, with a maximum of 40%. It entitles the CFO to 20% of base salary for ‘on target’ performances, with a 30% maximum. The Internal Auditor and Compliance Officer have no bonus scheme whereas the HR Manager is entitled to the performances with a maximum of 20% of base salary. All other Identified Staff are entitled to 20% of base salary for ‘on target’ performance, with a maximum of 30%. The composition of Other Identified staff has changed in 2017.

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 board. For the HR Manager , a relatively larger portion of the variable remuneration is based on qualitative goals.

The bonus remuneration is divided into a direct and an 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 3 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 Vesteda’s long-term interests.

To achieve even a stronger commitment of the management with the strategy and the business of the Fund the Identified Staff is entitled to exchange the cash component for phantom shares.

The variable remuneration policy for Identified Staff also includes claw back provisions. Up and until 2017 these provisions have not been applicable.