Remuneration and Organizational Development Report
Members of the Remuneration and Organizational Development Committee ('the Committee'): the Chairman and the members of the Committee are appointed by the Supervisory Board, and are at present Mr. Jager (Chairman), Mr. Risseeuw and Ms. Van Lier Lels.
Committee Charter: the Committee assists the Supervisory Board in establishing and regularly reviewing the Company's remuneration philosophy, the policies designed to execute this philosophy, and to ensure that senior management is compensated consistent with that policy. It also reviews and, if appropriate, recommends changes in the remuneration of the Supervisory Board and monitors management succession and organization plans. The Committee uses and seeks advice from an independent consultant firm and ensures they can act independent from the Company. The Committee annually reviews its performance against its charter and prepares the Remuneration Report to be included in the Annual Report to the shareholders of KPN.
Activities of the Committee: the Committee met five times in 2007 with all members present at each meeting. Consistent with its charter, the Committee reviewed remuneration developments in senior management, emerging practices in The Netherlands and abroad and potential implications for KPN in the immediate and mid term. This included a review from the Corporate Goverance Code Monitoring Committee. The Committee proposed actions, where appropriate, to adjust base salary levels and the short and long term incentive plans. It also proposes the targets of those plans, and monitors the internal and outside auditing of its results.
The Committee was involved in the employment extension of Mr. Scheepbouwer, and the various remuneration aspects. It also reviews shareholder feedback on remuneration matters, including the 2007 votes on the proposed adjustment in the settlement of the Performance Share Plan from an equity-settlement to a cash-settlement as a result of changes in the Dutch corporate tax regulations. Finally, the Committee conducted a review for the entire Supervisory Board on the development of managers below the Board of Management.