Publications in English

KPIs and sustainability performance

An empirical analysis concerning the use and development of KPIs on sustainability performance reporting for the largest stock listed firms in the Netherlands.

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The Impact of Ownership and Board Structure on CEO Compensation in the Netherlands

Abstract: The primary objective of this study is to better understand the impact of ownership and board structures on compensation of Chief Executive Officers (CEOs) in Dutch firms. For our sample of the 75 largest Dutch firms for the period 2006-2008 we find that ownership and board structure variables have significant additional explanatory power to commonly used economic determinants like size, performance and growth opportunities. Outside blockholders, external shareholders who own at least 5% of the shares, significantly lower the levels of total CEO compensation.

Ownership by management board members (excluding the CEO) and supervisory board members are also negatively associated with levels of various forms of CEO compensation. The effects of CEO ownership on compensation levels are, however, less conclusive. In contrast to our predictions, anti-takeover measures also seem to have a monitoring role and have a significant negative relation with CEO compensation. With regard to the board characteristics, the key variable is the size of the supervisory board. Larger or “overcrowded” supervisory boards are less effective which results in higher CEO compensation.

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Relative performance evaluation in the Netherlands

This study presents an overview of the recent developments in relative performance evaluation (RPE) within long term incentive schemes. Its discusses important elements like performance standards, peer group composition and target ranges. Relative performance evaluation within long term incentive plans (LTIPs) has become common practice amongst the largest companies in The Netherlands. Based on an empirical study of the main Dutch stock market indexes, i.e. the AEX, the AMX and the ASCX, for the years 2005-2007, this report describes current practice and assesses the pros and cons of various relative total shareholder return (RTSR) configurations commonly employed.

The report also provides a number of recommendations aimed at improving disclosures on remuneration and helping to improve alignment of incentive schemes and shareholder interests.