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Alignment with DSM’s corporate values and strategy

Remuneration Policy

and Triple Bottom line (CSR)Ben W. van DijkSeptember 3rd, 2010

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mechanical engineering

chemical engineering

polymer technology

material science

adv. organic chemistry

biotechnology

BioterialsBiologics

Competences

chemistry

Evolution

Coal

Fertilizers

Petro-chemicals

PerformanceMaterials

Life Science Products

Customer intimacy

1902 1930 1950 1970 1990 2000 2010

DSM: A Century of Transformation

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DSM’s Strategy Vision 2010

Exploiting strong market positions and technology platforms

Climate and Energy

Health andWellness

Functionality andPerformance

EmergingEconomies

EBAs

Life SciencesLife Sciences Materials SciencesMaterials Sciences

Nutrition Pharma PerformanceMaterials

PolymerIntermediates

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Leader 2009 / 2010Leader 2009 / 2010

Simultaneously creating value along three dimensions

Environmental: Planet• Improve eco-footprint throughout the value chain• Leader in white biotechnology

Social: People• Sustainability embedded in our company• More diverse workforce • Responsible partner in society

Economic: Profit• Sustainable value creation for our shareholders and customers • CFROI > 8.5%

Triple Bottom Line

DSM’s Triple Bottom Line

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We can’t be successful in a world that fails

Nr. 1

People Planet Profit

World Food Programme

Climate Change

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• Design of new MB Remuneration policy started two years ago.

• Anchor points new policy have been defined, based on consultation of Stakeholders (e.g. Shareholders, Labor Unions, Works council) and external Sustainability/Compensation experts.

• Crisis has confirmed the direction of the redesign Remuneration policy.

• Remuneration Policy approved by the AGM on March 31, 2010 (99,9 % in favor).

New MB Remuneration policy DSMNew MB Remuneration policy DSM

Alignment with DSM’s corporate values and strategy

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• Balanced reflection of DSM’s Strategic direction, Corporate Values and the interests of Stakeholders

• Sustainability fully embedded in the Remuneration policy

• Focus on short-term and long-term value creation• Acceptable remuneration levels, stimulating the

right management behavior• Improved transparency and simplicity• Full compliance with Corporate Governance

requirements

Main Characteristics of new Remuneration policy

Alignment with DSM’s corporate values and strategy

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• Equal distribution of fixed and variable income• Equal distribution of short-term and long-term

variable income.• Sustainability targets nearly 50% of performance

measures for short and long term variable income.• Variable income linked to measurable performance

criteria, predominantly of a long term nature• External remuneration benchmarking only every 3

years • Stock options abolished, performance shares only• Total Direct compensation (base salary plus

variable income) approaching the median of the market

• Competitive position in the labor market secured

Key Elements of New Remuneration Policy

Alignment with DSM’s corporate values and strategy

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Main elements revised remuneration policy

Current New

Base Salary

Yearly benchmark + review 3-yearly benchmark + yearly review by SB

Balance income

No Policy 50% fixed 50% variable

Balance STI –LTI

60% STI40% LTI

50% STI 50% LTI

STIPayout in cash Payout in cash

70% financial measures30% non-financial measures (incl. 10% individual targets)

50% financial measures50% sustainability and other value creating performance measures (incl.10 % individual targets)

LTIPayout in stock options and performance shares

Payout in performance shares only

100% financial measure (TSR) for vesting

50% financial measure (TSR) and50% sustainability measure (GHGE reduction over volume related Revenue) for vesting

Alignment with DSM’s corporate values and strategy

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STI – Performance Measures

Alignment with DSM’s corporate values and strategy

• DSM has defined value creating performance measures in the area of sustainability

• For 2010/2011 ‘first tier’ targets have been defined (see below). Further refinements/improvements of targets and weighting will follow at a later point in time (‘second tier’) based on proper evaluation

• The following shared target areas linked to sustainability have been defined for the STI:– ECO+ products – Profitable ECO+ product development,

consisting of:– Percentage phase transitions ‘Feasibility’ (phase 2) to

‘Development’ (phase 3) that meet ECO+ criteria– Percentage of Product Launches that meet ECO+ criteria

– Energy Consumption Reduction – linked to triple P target of 20% less energy consumption in 2020 compared to 2008

– Engagement Index – Related to the High Performance (HP) Industry norm

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LTI – Performance Measures

Alignment with DSM’s corporate values and strategy

• Managing Board Members will be eligible to performance shares only as part of the Long Term Incentive scheme. Stock options will be abolished

• Vesting of performance shares (3 years after granting) will be based on:

• Comparable TSR versus a peer group (50%)• Greenhouse Gas Emissions (GHGE) reduction

over volume related revenue (50%)

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