Remuneration report

Aims and principles underlying the remuneration policy

The aim of our remuneration policy is to attract, motivate and retain Executive Board members of the right quality and with the right experience, both from within the company and in the form of proven talent from the market. The remuneration reflects the responsibility borne by the members of our Executive Board, and is considered in the light of the applicable remuneration principles in the market (as explained below). Gasunie needs this managerial talent to achieve its strategic objectives. This policy is implemented based on the following considerations:

In principle, having the Dutch State as the sole shareholder, Gasunie applies the same criteria that are applied to the remuneration policy in state-owned companies. If the Supervisory Board feels that this may lead to unacceptable risks for the company, it will consult with the shareholder.

The structure of the remuneration of members of the Executive Board is determined on the basis of a market comparison that also takes into account the pay ratios within the company, thus creating a logically continuing salary line from the posts in the Executive Board to the posts under the Executive Board. Application of the variable remuneration policy depends on the achievement of short and long-term targets with respect to operational and strategic performance.

Remuneration structure

The remuneration consists of:

• a fixed component (annual basic salary)
• a variable component, dependent on the attainment of both short and long-term targets, as specified in the texts below
• the employer’s payment towards the pension contribution
• other secondary employment conditions.

Annual basic salary

When appointing members of the Executive Board, the Supervisory Board will limit the sum of the fixed and variable annual salary on appointment to a maximum of € 397,205 (2021 level) for the Chair of the Executive Board. A member of the Executive Board who is a director under the articles of association receives an annual salary of up to 90% of that of the Chair. A member of the Executive Board who is not a director under the articles of association (a ‘titular director’) receives an annual salary of up to 80% of that of the Chair. The Supervisory Board decides on the level of annual salary increments. If the maximum salary has been reached, further growth is limited to the across-the-board increments laid down in the collective labour agreement.

Variable remuneration

The variable remuneration is based on the remuneration policy that has been approved by the shareholder. The maximum variable remuneration is 20% of the annual basic salary. The targets that must be attained in order to qualify for variable remuneration are agreed annually. These must be ambitious and reflect the company’s strategy focused on long-term value creation. The achievement of the objectives is determined on a discretionary basis, taking into account all circumstances and developments over the past year.

The Supervisory Board is authorised to adjust the variable component within the limits mentioned above if it is likely to lead to unfair outcomes due to exceptional circumstances during the performance period. The Supervisory Board is also authorised to reclaim from members of the Executive Board a variable bonus that was awarded on the basis of inaccurate financial or other data or ‘incorrect conduct’.

The Supervisory Board has chosen performance criteria that relate to the implementation of Gasunie’s strategic goals, both for the short and the long term. In defining the company’s strategy, the social function of Gasunie’s activities and their effects on society are explicitly taken into account. Performance criteria have therefore also been defined in the areas of safety and transmission security.

The variable remuneration elements are divided over five performance indicators, each with a weighting of 4%. Four regular performance indicators relate to achieving Gasunie’s business objectives in a safe, affordable and reliable manner, and to significantly advancing the company in achieving its long-term strategic objectives. Each year, the Supervisory Board sets a specific fifth performance indicator that focuses on a topic concerning which extra attention is requested in that year. The variable remuneration depends partly on sustainability performance within the scope of the five indicators. The current remuneration system does not allow quantification of how much of the total variable remuneration is determined by sustainability performance. For 2024, the five performance indicators were:

1. Operational excellence (weighting: 4 percentage points): financial results and performance in the areas of safety and operational reliability (TRFI, uncontrolled events and transmission interruptions), reducing our own emissions (reduction of location-based Scope 1 and 2 emissions and megatonnes of emission savings facilitated), developing CSR policy, improving ESG scores, decision-making on integrated value, the digital roadmap, and IT security. 
2. Growth in business focused on long-term value creation (weighting: 4 percentage points): progress in the development of our business development portfolio and in the completion of projects in accordance with Vision 2035 in the area of hydrogen and CO₂ infrastructure. 
3. Organisational development for long-term value creation (weighting: 4 percentage points): implementing the strategic HR plan and sourcing, securing the capacity to implement the business development portfolio, implementing the diversity agenda, reducing long-term sickness absence, increasing social security, and anchoring collaboration between the Dutch and the German organisation.
4. Positioning of both gas (natural and other) and Gasunie for long-term value creation (weighting: 4 percentage points): advising on ensuring security of supply, advising on policy, legislation, and regulation – in the Netherlands and Germany and at EU level – for natural gas and on the energy transition agenda (hydrogen/CCS/biomethane/heat), further development of the Transition Pathway Initiative, and creating thought leadership in the energy debate.
5. A performance indicator that changes year by year (weighting: 4 percentage points): For 2024, this involved recalibrating the strategy, cooperation on the Executive Board in a new composition, and developing a ‘large-capital project organisation’.

Gasunie had a successful year in 2024. The Executive Board revised the strategy, involving internal and external stakeholders. The revised strategy enables Gasunie to take the right steps forward in the coming years. Gasunie's performance was commendable in many areas. Both management and employees have put a great deal of effort into supporting the energy transition and strengthening security of supply for northwest Europe. The energy transition portfolio continued to develop. For example, the decision in principle was taken to participate in the German hydrogen network and the construction of the Porthos project (CCS) and of the hydrogen network in Rotterdam started. Final investment decisions for projects such as German LNG and the German natural gas network strengthened security of supply. In addition, the Dutch government expressed support to designate Gasunie as transmission system operator for an offshore hydrogen network.

On the other hand, not everything went well. The roll-out plan for the hydrogen network in the Netherlands was revised, resulting in an updated schedule and a cost increase. Other projects such as WarmtelinQ and GermanLNG also faced rising costs. Safety performance is still below target and Gasunie did not meet targets on all elements. This results in a lower score for Operational excellence, Growth in business and Strategy, composition and developing a large capital project organisation.

Payment of the variable remuneration takes place after adoption by the shareholders' meeting.

Pension

The Gasunie pension plan applies to members of the Executive Board. This is based on average pay and includes a personal contribution from the members of the Executive Board in accordance with the rules that also apply to other Gasunie employees.

Other secondary employment conditions

Gasunie has put together a package of fringe benefits for its Executive Board members, which also applies to other staff. This includes compensation for home working facilities, a flexibilisation budget, a training budget, a lease car, a mobile phone and laptop, and more.

Other conditions

Term of service

Members of the Executive Board are appointed for a period of four years, with the possibility of extension by four years. The members of the Executive Board under the articles of association have an employment contract with Gasunie for the same duration as their term of service. Their employment contract therefore ends automatically if they are not reappointed.

Notice period

Members of the Executive Board must provide three months’ notice of termination of their employment contract; for the company, a notice period of six months applies.

Severance pay

In compliance with the Dutch Corporate Governance Code, severance pay for Executive Board members is limited to a maximum of one year’s basic salary (i.e. the fixed part of the remuneration). This compensation also includes any transition compensation. In principle, no severance pay is granted if a member of the Executive Board is not reappointed; a proposal from the Supervisory Board to deviate from this principle requires the approval of the shareholder. 

Change of control

Executive Board members are covered by a ‘change of control’ clause, which states that if they are forced to leave the company due to a merger with, or the acquisition of the company by, an external party, or in the event of a fundamental change in the nature, management or structure of the company that is beyond the control of the Executive Board, they will be awarded compensation up to a maximum of one year’s basic salary (i.e. the fixed part of the remuneration), regardless of which party terminates the employment contract.

Pay ratio

The pay ratio at Gasunie is 4.31 (2023: 4.18). This is the ratio between the total remuneration of the highest paid employee and the median of the total remuneration of all other employees in the Netherlands. The total remuneration is based on the sum of the annual taxable pay and the pension costs (employer’s contribution). In calculating the median, only those employees are taken into account who were employed for the entire year. The pay ratio increase came on the back of the higher variable remuneration paid to the highest earning employee in 2024, compared to 2023.

In Control Statement

With reference to best practice provision 1.4.3. of the Dutch 2022 Corporate Governance Code, the Executive Board declares that:

• the report provides sufficient insight into any failings in the effectiveness of the internal risk management and control systems with regard to, in any case, the strategic, operational, compliance and reporting risks (best practice provision 1.2.1); 
• the aforementioned systems provide reasonable assurance that the financial reporting does not contain any material misstatements; 
• based on the current state of affairs, it is justified that the financial reporting be prepared on a going concern basis; and 
• the report states the material risks, as referred to in best practice provision 1.2.1, and the uncertainties, to the extent that they are relevant to the expectation of the company’s continuity for the period of twelve months after preparation of the report.