The key objective of the NS remuneration policy is that this policy should enable the Supervisory Board to attract and retain well-qualified members for the Executive Board. The remuneration policy is aimed at supporting and furthering NS’s objectives and strategy. At the same time, the remuneration policy reflects NS’s public status.

Objectives and principles

• Given that the Dutch State is the sole shareholder, the remuneration policy is based on the principles for the remuneration policy of state participations.

• The determination of job grades is an important element in determining levels of remuneration.

• To determine remuneration levels for the Executive Board, a market comparison is used based on two reference markets: the public and semi-public sector (AMC, the Tax and Customs Administration, GVB, Havenbedrijf Rotterdam, the Ministry of Infrastructure and the Environment, ProRail and Vitens) and the Dutch private sector, using weights of 60% and 40% respectively.

• NS pays board members based on the market median salaries in the above reference markets.

• When determining the remuneration of the Executive Board members, the remuneration policy’s impact on long-term value creation was taken into account. For NS, this means that when the remuneration is determined, it is done so taking into account NS’s position in society, its obligations by virtue of the franchise and the long-term challenges for mobility in the Netherlands.

• The NS remuneration policy satisfies the best-practice stipulations on remuneration in the Corporate Governance Code.

Remuneration components

• Base salary

• Variable remuneration

• Pension

• Benefits

The financial statements contain a table in Section 2 of the Financial Statements showing all the remuneration components.

Base salary

In 2018, the gross annual base salary including the holiday allowance for the members of the Executive Board was as follows:

The difference between the annual base salary and the base salary received is due to the fact that the salaries were increased by 2.3% as of 1 October 2018 as a result of the collective labour agreement. This is in line with the remuneration policy. The overall income of the employee with the highest base salary, namely the Chairman and CEO, is nine times the median value of the salaries of all NS staff in the Netherlands^[1].

• 1 Basic assumptions:All staff at NS and Abellio Nederland who were employed by NS throughout the year are included in the calculation.The calculation is based on the following components: the base salary, variable remuneration and pension costs.The above components apply to both the staff and the Chairman and CEO. Both full-time and part-time staff are included in the calculation.

Variable remuneration

All members of the Executive Board have explicitly waived the right to variable remuneration in their employment contracts.

Pension

All members of the Executive Board are also members of the NS pension plan. The employer’s share of the pension costs for the entire Executive Board was €73,385 in 2018 (2017: €68,547). The employer pays two thirds of the total pension costs.

As required by legislation, pension accrual is capped at a salary of €105,075. NS and the trade unions have agreed to pay out a gross contribution in addition to the salary as an alternative for the cap on pension accrual. NS is allocating a gross contribution of 12% of the salary in excess of €105,075 to all current and new staff. A transitional scheme applies for members who were 46 or older on 1 January 2015. They receive a supplementary age-related contribution. The percentage in question is determined once only. In 2018, members of the Executive Board received a contribution on the same basis as in the above scheme for NS employees.

Benefits

The benefits that apply to all other NS employees, including healthcare insurance schemes and transport facilities, also apply to the Executive Board members.

The benefits package for the Executive Board also includes an appropriate expense allowance, a lease car and the use of communication devices. The lease scheme offers the option of waiving the right to a lease car and being paid the gross lease amount instead. Board members can also make use of a chauffeur-driven directors’ car. This directors’ car should only be used for business trips. NS takes this to include business trips not directly associated with the job, but where private use is unavoidable given the combination with the obligations associated with the position at NS. An addition to the taxable income is applied for the directors’ car because of this use that is not directly linked to the job. As the addition to the taxable income is caused by private use that is unavoidable given the combination with the obligations associated with the position at NS, the Executive Board members receive an allowance for the tax owed on the addition to the taxable income. This allowance is designated as part of the work-related costs scheme and is therefore paid to the Executive Board as a net amount.

• * Mr van Boxtel used the directors’ chauffeur-driven car in 2018 and this was compensated by waiving the gross payment of the lease amount. Ms Rintel and Mr Smit had lease cars in 2018. Ms Rintel did not use the entire lease allowance and therefore received payment of a portion of the lease amount. Mr Smit did use the entire lease allowance and therefore did not receive any such payment.

The company has not extended any loans, advances or guarantees to members of the Executive Board.

Employment contracts

Members of the Executive Board are appointed for a period of four years at the most. Reappointments can be made for periods of four years.

All employment contracts with members of the Executive Board include a period of notice for the employer of four months.

On termination of the employment contract at the initiative of NS, the severance payment cannot exceed one year’s base salary. No severance payment will be paid in the event of seriously culpable or negligent conduct.