In 2014, in addition to the regular themes, the Supervisory Board primarily focused on the changed market conditions and TMG’s strategy. The Board is confident that with the measures that have been taken and the refined strategy, TMG is on course.
The media landscape is changing. Consumers are increasingly more often opting for online media instead of print, and national advertisers are increasingly shifting their budgets from print to TV and online. To be able to decisively respond to the rapidly changing consumer behaviour and the shifts in the media landscape, the Supervisory Board decided to renew and strengthen the Executive Board.
During the past year, the Board met with the Executive Board during regularly planned meetings thirteen times, one of which was by phone. In addition to the regularly planned meetings, there were five additional meetings with the Executive Board, two of which were by phone. On average, 94% of the members of the Supervisory Board were present during these meetings. During these meetings they regularly discussed the general, financial and operational state of affairs of Telegraaf Media Groep and its subsidiaries.
It should be evident that the renewed Executive Board has certain ideas and insights into the strategic focus and course to be pursued. We discussed this extensively with the Executive Board during a number of strategic sessions, whereby we devoted a great deal of attention to the difficult market in which TMG operates. Various strategic dilemmas were addressed during these discussions, including the transition from print to digital. This trend in consumer behaviour requires innovation, and proactive entrepreneurship. A strong digital offer on the basis of our powerful brands is the only way in which to maintain and reinforce the long-term relationships with our consumers. The changed media use among consumers and advertisers was extensively discussed. A focus on the key brands offers TMG more opportunities to capitalise on existing value and competencies within the organisation. The dilemmas related to the financial performance of the underlying products and the condition of the ICT environment were extensively discussed as well.
Topics such as mergers and acquisitions, disinvestments, potential partnerships and the status of the reorganisation were also on the agenda. The Board also discussed topics such as risk management, governance and HR. A special topic in 2014 was the appointment of the new Executive Board. In addition, we were regularly informed by the Executive Board about important trends in the media sector. The Supervisory Board devoted specific attention to the collaboration between the Executive Board and the Supervisory Board. The number of meetings together with the Executive Board has been increased since the end of 2013. In this context, the Supervisory Board took a look at the desirability of instituting a one-tier-board and acquired external advice on this subject. It was decided not to institute a one-tier-board. This is not required to increase the Supervisory Board’s involvement. This goal can also be achieved in other ways; for example through more frequent meetings with the Executive Board.
On 8 January 2015, in a meeting of the Executive Board with the Chairman and Vice-chairman of the Supervisory Board, the performance of the Executive Board was evaluated. The Chairman and the Vice-chairman verbally reported on the results of their meeting in the Board’s meetings.
Several informal meetings were held between the Supervisory Board and the Central Works Council (CWC), and with the day-to-day management of the CWC during the reporting year. In addition, the Supervisory Board met 7 times in the absence of the Executive Board. These meetings generally took place following the termination of the regular meeting of the Supervisory Board. During these meetings the composition and performance of the Executive Board and the Supervisory Board, the adjustment and progress of the strategy were being pursued, and the organisational changes were discussed. Two of our members attended four CWC meetings and two other meetings during 2014. In addition, the Board informally met with the CWC on one occasion.
During the 2014 General Meeting of Shareholders, Cees van Steijn, CEO ad interim, bade farewell to TMG. Fred Arp, member of the Executive Board since July 1997, stepped down effective 1 November 2014. We are extremely grateful to both for their devotion and contributions.
The termination arrangement agreed upon with Mr Arp is recorded under chapter 'Remuneration of executive board en supervisory board members' in the Financial Statements.
The Supervisory Board was regularly kept informed of the activities of the Chairman, Michiel Boersma, in his role as delegated Supervisory Board member during the period of 5 April 2013 to 1 July 2014. On average, this task occupied one and a half days per week. Activities primarily consisted of discussions with the Executive Board and internal and external stakeholders. After 1 July 2014, the Chairman relinquished his tasks as delegated supervisory board member.
Ms Margriet Tiemstra, and Messrs Joop Drechsel and Daniël Ropers stepped down as Supervisory Board members during the General Meeting of Shareholders of 24 April 2014. The Board would like to express its sincere appreciation to Ms Tiemstra and Messrs Drechsel and Ropers for their contribution and devotion during the time they served as members of TMG’s Supervisory Board. Ms Annelies van den Belt and Ms Simone Brummelhuis were appointed as Supervisory Board members during this same meeting.
The Supervisory Board complies with the independence criteria of Best Practice Provision III 2.1 of the Corporate Governance Code. Mr Guus van Puijenbroek is considered an independent supervisory director in accordance with the aforementioned criteria.
The Audit Committee is a permanent and preparatory Committee of the Supervisory Board. The Audit Committee consists of Messrs Jan Nooitgedagt (Chairman), Guus van Puijenbroek, Ms Annelies van den Belt and Ms Simone Brummelhuis. The Audit Committee held seven regular meetings with the Executive Board, the external auditor Deloitte and TMG’s staff heads of Internal Audit, and Corporate Finance and Administration. One of these meetings was conducted by phone. Average attendance at these meetings was 98%. Topics discussed included TMG’s annual, semi-annual and quarterly figures, the press releases, the 2015 budget, the internal risk management and control system and its actual implementation, the status of operational and strategic risk management, the audit findings and the follow-up on prior audits, the management letter and improving the tone at the top through means of workshops. In addition, the lack of sufficient automated controls and the In Control Statement were discussed. Specific topics discussed during these meetings were, among other things, the cash flow forecast versus the bank covenants, the management letter and potential impairments.
The Remuneration Committee is a permanent and preparatory Committee of the Supervisory Board. The Remuneration Committee consists of Jan Nooitgedagt (Chairman), Michiel Boersma, Simone Brummelhuis and Guus van Puijenbroek. The Remuneration Committee met eight times in 2014. Four of these meetings were held jointly with the Selection and Appointment Committee. Attendance at these meetings was 100%. The non-exclusive list of topics discussed during the meetings included the remuneration of the Executive Board for 2014, the remuneration of Supervisory Board members, the Executive Board’s remuneration policy, the Long-term Incentive Plan for the Executive Board, and the joint and individual objectives of the members of the Executive Board for 2015.
The Selection and Appointment Committee is a permanent and preparatory Committee of the Supervisory Board. The Selection and Appointment Committee consists of Michiel Boersma (Chairman), Jan Nooitgedagt, Guus van Puijenbroek and Simone Brummelhuis. The Committee met nine times in 2014. Attendance at these meetings was 100%. The non-exclusive list of agenda items discussed during these meetings included the composition of the Supervisory Board, the composition of the Executive Board, the appointment of a new CEO and CFO, and new management team members.
New legislation went into effect in 2013, concerning the balanced composition of the Executive Board and the Supervisory Board. Pursuant to this legislation at least 30% of board members must be male and at least 30% must be female. The composition of the Supervisory Board meets these percentages. In appointing Mr Van der Snoek and Mr Epskamp in 2014, their knowledge of and experience in the media sector, management experience and experience gained with change and restructuring initiatives was decisive. An active search for female candidates was conducted, however no qualified female candidates were found. In making new appointments to the Executive Board, the Supervisory Board will strive for a balanced and appropriate composition. All relevant criteria will be included in this process. TMG aims to appoint women to higher management positions who in the future can advance to the Executive Board. An active HR policy will be developed for this purpose in which succession planning will fulfil an important role.
2014 was a year with challenging market conditions and many organisational changes designed to better prepare TMG for the future. This has required a great a deal of effort from many. We would like to thank TMG’s Executive Board and employees for the manner in which they discharged their duties in 2014.
We hereby present the report, the balance sheet as at 31 December 2014 and the income statement for 2014 with explanatory notes, as compiled by the Executive Board. The financial statements have been audited and approved by Deloitte Accountants B.V. in Amsterdam, as stated in the auditor’s report included in this annual report.
We discussed the financial statements at the annual meeting with the auditor, after which we signed the financial statements to comply with our legal obligation pursuant to Article 2:101 paragraph 2 of the Dutch Civil Code.
We recommend that:
Amsterdam, 10 March 2015
On behalf of the Supervisory Board
Michiel Boersma, Chairman
Remuneration Policy for the Executive Board
The remuneration policy can be viewed on TMG’s website (www.tmg.nl). The remuneration structure was amended during the Meeting of Shareholders of 24 April 2014. The following stipulations apply in a general sense:
In accordance with best practice provision II.2.8 of the Dutch Corporate Governance Code a provision for a severance payment is included in the engagement contract of newly appointed members to the Executive Board. The severance payment applies in the event of the early termination of the engagement contract by Telegraaf Media Groep N.V. This severance payment is established in accordance with the neutral Subdistrict Court Formula, last amended on 30 October 2008, on the understanding that Factor B, in variance from the Subdistrict Court Formula, is equal to one fixed gross monthly salary payment (and therefore not increased by fixed and agreed upon wage components nor by any variable wage components) and that the severance payment will never be more than a total of a maximum of 12 gross fixed monthly salary payments as specified in the previous sentence.
The pensionable age of new members of the Executive Board is the State Pension (AOW) age and members of the Executive Board are entitled to participate in the Stichting-Telegraafpensioenfonds 1959 (Telegraaf Pension Fund Foundation). This pension scheme is an average salary pension scheme with a surviving dependants’ pension on an accrual basis.
The remuneration of the members of the Executive Board is structured as follows:
Telegraaf Media Groep N.V. does not provide any personal loans, guarantees and the like to members of the Executive Board unless this forms part of the company’s normal conduct of business and then subject to the same conditions that apply to the entire personnel complement and after approval by the Supervisory Board.
The Supervisory Board each year decides on any adjustment and/or indexation of the fixed remuneration component. In terms of the variable component, the Executive Board each year formulates draft objectives for the next financial year and submits these to the Supervisory Board. These are in part focused on the long-term objectives of TMG and its affiliated companies, and are in accordance with the company's risk profile.
The 2014 objectives for Mr Van der Snoek consisted of strategic, financial, HR and communication-related and operational objectives. Mr Epskamp’s objectives were primarily financial in nature. The objectives set for Mr Arp, former CFO, were comparable.
The remuneration of the Supervisory Board was amended during the Meeting of Shareholders of 24 April 2014, with retroactive effect to 1 January 2014. The remuneration of the Chairman of the Supervisory Board was increased from € 38,364 to € 45,000 per year. The remuneration of the other members of the Supervisory Board was increased from € 33,252 to € 35,000 per year. The remuneration of the Chairman of the Audit Committee is € 6,500 and the remuneration of the other members of the Audit Committee is € 5,500 per year. The remuneration of the Chairman of the Remuneration Committee and of the Chairman of the Selection and Appointment Committee is € 6,000 and the remuneration of the other members of these committees is € 5,000 per year.
The new remunerations will be indexed annually on the basis of the CPI index. Incurred expenses are reimbursed separately.
Nonsensical statements, statistics and around the block with the dog are the ingredients for Jaap van Duijn's weekly column. "Half an hour of typing and it's on paper."
Name: Jaap van Duijn
Brand: De Financiële Telegraaf
"I still follow all the share prices and whatever's going on in the economy, even though I've retired. The fact that I have my own investments and also my weekly column for DFT forces me to keep up. Of course I could follow what other journalists write but I refuse to depend on someone else. Whatever I write has got to be correct. And there's a lot of nonsense out there, you know. Ministers are good at that, as are chairmen of the board and journalists. They often lack the perspective of the historical context. When I read things that don't make sense, I want to correct them in my column. I generally get on my racing bike or go around the block with the dog to think about my approach and vocabulary. And then I type for an hour and it's done.
What I really like about working for De Financiële Telegraaf is that my column reaches so many readers. I was recently approached by a man in the supermarket, who asked 'Aren't you Mr Van Duijn? I always read your piece first. You describe things so clearly that even my wife understands'. I'm not sure what that says about his wife but that's why I do it: to boost the economic know-how of my readers.
I didn't know how the investment world worked in the beginning. I like to compare it with my sporty side. I've run marathons, climbed mountains and skated the long-distance Elfstedentocht race, but while I could justifiably call myself an experienced expert after finishing the latter in 1986, it doesn't work that way in investments. I started investing at the age of 18, using my first salary from the bank where I worked. It was a case of 'let's get rich quick', but it didn't work: I lost half my money. With hindsight, it's the best thing that ever happened to me. It made me more aware of financial risks and how to deal with them, though economic developments will always be unpredictable. I'm 71 now and I still don't know exactly how it works.
After studying economics, I taught as a professor in Delft. In due time, I switched to 'the real work': managing money at Robeco. That was by far the best but also the most difficult time of my life. In the end, I had 24 billion guilders in my portfolio, an enormous responsibility that really kept me absorbed. In the second half of the 1990s, it was one big party at work as the prices continued to soar. When the prices dropped following the attacks of 11 September 2001, I had many a sleepless night. I just kept thinking, ‘when will this stop?’ It didn't. You'd rather not be in that situation at such moments, but, looking back, I'm glad that I also experienced those restless years. It's pretty much like the Elfstedentocht really: while you're skating, all you want to do is reach Leeuwarden. You don't appreciate what you've done until the finish. I get that same feeling when receiving compliments in the supermarket."