The Dutch Corporate Governance Code
USG People applies a policy in line with the Dutch Corporate Governance Code (hereinafter referred to as ‘the Code’) (see the Government Gazette no. 18499 of 3 December 2009 for the text of the Code). The Code is based on the ‘comply or explain’ principle. That means that companies listed on the stock exchange are required to explain in their annual report how they complied with the Code and to give a motivated account of the principles pertaining to the Executive Board and Supervisory Board as well as of any best practices which have not been applied.
deviations from the Code
At various General Meetings of Shareholders USG People rendered account for its compliance with the Code and – if necessary – provided a duly substantiated explanation why the organisation deviates from the Code in the case of a certain provision. In doing so USG People is in compliance with the Code. The following provides an explanation of the best practice provision from which USG People deviates.
The new remuneration policy for the Executive Board for the period 2015-2018 came into force on 1 January 2015. The remuneration policy complies with the provisions of the Dutch Corporate Governance Code, with the exception of severance pay upon termination of an Executive Board member’s contract of employment in the event of a takeover of the company resulting in a change of control. In this case the termination payment shall amount to twice the fixed gross annual salary, including pension contribution, increased by one-twelfth of this fixed gross annual salary, including pension contribution, for each year of employment with USG People. However, this termination payment shall not exceed three times the fixed annual salary including pension contribution. This is at variance with provision II.2.8. of the Code. USG People applies this policy regarding severance pay in the event of a change of control in recognition of the long-term employment of members of the Executive Board and moreover, given the shareholder structure of USG People, to protect their position as directors of the company.
In addition the remuneration policy for 2015-2018 deviates from the provision that shares granted must be held for at least five years without financial compensation (best practice provision II.2.5). Instead of this requirement stipulated in the Code the members of the Executive Board of USG People are required to hold at least twice their fixed gross annual salary in USG People shares during their full term of employment. USG People opts for this shareholding requirement to ensure an alignment with the interests of shareholders.
USG People gives its shareholders the opportunity to follow analyst meetings, analyst presentations and presentations to (institutional) investors and the media. These meetings and presentations are announced in advance via the website. A meeting/presentation is occasionally held that shareholders cannot follow in real time. This is at variance with best practice provision IV.3.1. In such cases shareholders are informed about the meeting/presentation via a press release.