NETHERLANDS - A group of six Dutch pension funds and institutional investors, led by the large schemes ABP and PGGM, has objected against the proposed payment package for chairman Ad Scheepbouwer of Dutch telecoms giant KPN.

The group's main objection was aimed at the promised ‘long-term' maximum bonus of €3m a year in shares, for extraordinary performance. This on top of a salary worth €1m.

"Even with the best will in the world, we fail to appreciate how a performance period of one year can be seen as long-term," argued spokeswoman Femke van ‘t Groenewout - PGGM's senior adviser on social responsible investment, during KPN's shareholders' meeting earlier this week.

An additional objection of the institutional investors was Scheepbouwer will be allowed to immediately cash-in on his shares at his planned retirement in 2011.

"A delay in the allowed sale would have been an extra stimulus for good performance," Van ‘t Groenewout explained.

According to Ton Risseeuw, chairman of the supervisory board, Scheepbouwer deserves the bonus, since he has already passed the official retirement age of 65. "A special reward applies to this special situation," he said.

Three-quarters of the shareholders agreed with the proposed financial arrangements for Scheepbouwer.

Besides PGGM and ABP, the group of institutional investors consisted of pensions providers MN Services, SPF Beheer and Grafische Bedrijfsfondsen (GBF), as well as asset manager Robeco. Together they represented less than 1% of KPN shares.