Ladies and gentlemen, my name is Frans Cremers. I would like to welcome you to the annual general meeting of shareholders of Wolters Kluwer, and I realize that for some of you it's very early in the morning. As the impact of the COVID-19 virus continues to evolve, our top priority is to protect the health and safety of our employees, customers, investors, and, of course, society at large. This is the reason why this AGM is taking place in a different way than we are all used to. It is appreciated that many of you have taken the opportunity to exercise their voting rights by way of electronic or written proxy, and some of you have, given the extraordinary circumstances, submitted your questions relating to the agenda for this meeting in advance by email.
We will address these questions during the relevant agenda items and make note of this in the meeting minutes. Due to the public health measures and travel restrictions currently in place, it has been decided that I'm the only member of the Supervisory Board physically present, while the other members of the Supervisory Board and the Executive Board are participating remotely. I would like to express a special welcome to all those shareholders and interested parties that follow today's meeting remotely by logging in to the live audio webcast, and also a welcome, of course, to my fellow board members and the Executive Board. For this reason, it is proposed to conduct the meeting in English, for which we kindly ask your understanding. Our auditor, Mr. Dielissen of Deloitte, and our company's notary, Mrs. Leemrijse, of the firm Allen & Overy, are both with us today.
Mrs. Leemrijse is joined today here in Alphen, while Mr. Dielissen is attending remotely. We have complied with all statutory provisions and the provisions of our Articles of Association for convening this meeting by posting the meeting notice on our website on March 11 and announcing it by press release. Subsequently, the company has shared information updates with its shareholders relevant to holding this meeting in a safe and appropriate manner. The agenda, with explanatory notes including the proposed remuneration policy for the Executive Board and the Supervisory Board and the annual report, were timely published, have been deposited for inspection by shareholders in the prescribed manner. Shareholders who are registered in the company shareholders' register have also been notified by letter to attend this meeting.
Because these requirements of the Articles of Association have been observed, resolutions can be validly adopted at this meeting, and as soon as the exact number of shares present or represented is known, I will inform you. An audio recording will be made to correctly produce the short report of this meeting. Questions that were submitted prior to the meeting that will be answered live during this meeting will be read out loud by myself on behalf of the relevant shareholder. There are at present no shareholders physically present in the meeting, and I thank all of those for that. Let us now turn to the meeting agenda, and I would like to discuss agenda items 2A, 2B, 2C, and 3A together. We will, of course, vote on it separately.
To introduce agenda items 2A, 2B, and 3A, I would now like to give the floor to Nancy McKinstry, CEO and Chairman of the Executive Board, and Mrs. McKinstry joins us by audio conference as she currently is in the United States.
Thank you, Frans. I'd like to add my welcome and well wishes to those of you who have joined on the webcast today. Due to the extraordinary circumstances, I am unable to return to the Netherlands to be at this meeting in person, and I too ask for your understanding today. Before reviewing our strategic progress and our performance in 2019, I'd like to discuss how during this COVID-19 crisis, Wolters Kluwer has been focused on supporting our customers around the world and also tell you about how we've been taking measures at the company to protect our employees and other stakeholders. This global crisis is impacting all of our customer segments, but most of all, it has placed enormous pressure on our customers in healthcare.
Since the beginning of this outbreak, our Health division has been actively supporting doctors, nurses, and other hospital professionals who are working around the clock caring for COVID-19 virus patients. Wolters Kluwer has been providing its critical medical information solutions at no charge to non-subscribers around the world. Our UpToDate medical resource was made available for free to non-subscribers in China a few months ago, and currently, the free guest passes are available worldwide. This resource is providing clinicians and medical researchers access to the very latest evidence-based medical knowledge on the COVID-19 disease in real time. With UpToDate, clinicians are kept abreast of new developments and new evidence on the disease, and with ME patient engagement and education tools, they can provide patients at home and in the hospital with safety tips and other instructions to aid their treatment.
Our medical research platform, Ovid, has also opened up free access to a wide range of curated COVID-19 medical and nursing resources for scientists, epidemiologists, clinical researchers, and nurses. Our top priority is the health and safety of all of our 19,000 employees worldwide and the communities in which we operate. Ten years ago, we would not have been able to do what we did last month. Since the middle of March, we've been shifting to a global work-from-home policy. Today, over 95% of Wolters Kluwer employees are working from home, with only a small number of critical employees working on site. Our employees are adapting well to this new work environment, and we have stepped up our collaboration efforts, sharing best practices around sales, marketing, and delivering professional services. This shift was made possible because of the investments we've made over the years to digitize our operations.
Employees worldwide are using digital and remote working tools such as Skype and Microsoft Teams to continue to collaborate with colleagues and interact with customers. The increased levels of remote working required us in a short space of time to add capacity and redundancy to our IT infrastructure. Playing our part in protecting everyone's health has also led us to hold this annual shareholding meeting in the format we have today. While adapting to these unprecedented circumstances, we are keeping our focus on the long-term strategic direction of the company. As we laid out in early 2019, we have set ourselves three priorities for the three-year plan, which covers 2019 through 2021. Our first priority is to grow our expert solution products. Expert solutions are digital products that provide not only high-quality professional information but also deliver insights, analytics, workflow automation, and productivity benefits to our customers.
Our second priority is to transform our information products and services by enriching their content and leveraging advanced technologies to bring our customers more actionable, intelligent, and automated workflows. Our third priority is to drive operational agility. By this, we mean further improving our organization's ability to respond quickly to opportunity and changes in our markets. Let me review the progress we've made in 2019 on these strategic priorities. With respect to growing our expert solutions, we reported recently that expert solutions achieved organic revenue growth of 7% in 2019. This growth was supported by sustained investment, particularly in sales and marketing and product development. Expert solutions made up just over half of our group revenues in 2019.
With regard to our second strategic priority, advancing domain expertise and transforming our information products, we worked on several initiatives around the company to deploy advanced technologies such as machine learning and robotic process automation to add functionality and automation to our traditional content-driven products. This strategic goal will take longer to show up in our results, but we are very excited about the long-term opportunities here. Where we made very significant progress in 2019 was in driving agility. We implemented a new global enterprise system across back office and front office functions, including in finance, procurement, and HR. We also strengthened security and continued transitioning our products to the cloud. The rapid implementation of a global work-from-home policy I mentioned earlier is a testament to the agility that our teams are demonstrating.
To illustrate what we mean by an expert solution, I'd like to walk you through an example from our Legal and Regulatory division. Enablon and eVision operate in the EHS and ORM software market. This stands for Environmental Health and Safety and Operational Risk Management. This business provides modular solutions that help corporations collect, track, and monitor data to help them manage risks in their operations. The data can be collected in real time, for example, from workers connected with an app on their mobile phone, and then can be acted upon quickly to prevent workplace incidents. The software solution can also handle work to stay in compliance. In the current COVID-19 crisis, Enablon has launched new features, templates, and configuration packages free of charge to help its customers manage coronavirus risks and impacts.
For key sectors that continue to operate in these times, such as food, logistics, grocery, and pharmacies, these new tools allow companies to keep their employees, contractors, and supply chain vendors informed of risks and ensure that preparedness and risk mitigation plans can be followed. Now let me turn to 2019 results and summarize for you our achievements with respect to financial and non-financial performance. In 2019, we achieved good performance across the group, delivering 4% organic growth. Our digital products and services grew 6% organic, and as mentioned, the expert solutions grew 7%. We also achieved further improvement in our margin, exceeding our own expectation last year following a strong fourth quarter. We delivered 11% growth in diluted adjusted earnings per share in constant currencies.
We reported adjusted free cash flow of over EUR 800 million and ended the year with an even stronger balance sheet and an improved return on invested capital. Last year's dividend payments coupled with share buybacks meant that we returned over 70% of our free cash flow to shareholders in 2019. As these charts show, 2019 was a continuation of several years of strong performance. On the top left, you can see that our organic revenue growth rate has steadily improved from a rounded 1% in 2013 to 4% in 2019. Below left, you see that our adjusted operating profit margin has been gradually increased over the past five years, rising to 23.6% in 2019. The top right chart shows that our return on invested capital has steadily improved, reaching 11.8% in 2019.
Finally, in the bottom right chart, you see that we've delivered year-on-year increases in diluted adjusted EPS over the past six years. This strong performance has meant that our balance sheet leverage has reduced even further, as shown by a net debt to EBITDA ratio of just 1.6 x at year-end 2019. This is the lowest leverage we have reported for over a decade, putting us in a comfortable position as we continue to invest in the business, pay dividends, and use cash for share buybacks. We also have ample liquidity. We have cash on hand and an undrawn EUR 600 million multicurrency credit facility, which we expect to extend before it matures next year. Apart from a EUR 250 million private loan, we have no other long-term debt maturing in 2020.
In light of our strong financial position and our expected capital needs for the duration of our current three-year strategic plan, we are proposing to increase the total dividend per share for the financial year 2019 by 20%. We are therefore recommending a final dividend of EUR 0.79 per share, bringing the total dividend to EUR 1.18 per share. This proposal is subject to your approval today. In February, we announced a share buyback of up to EUR 350 million during 2020. So far this year, we have completed EUR 115 million of share repurchases under this program. As shareholders in the company, the recent downturn and volatility in the market can at times cause concern. We are keeping a long-term perspective on value creation.
While COVID-19 is providing a challenge for almost everyone, we believe that in the long term, we can continue to drive value for our shareholders by focusing on executing our strategy and delivering value to our customers. This chart shows in blue the Wolters Kluwer share price since year-end 2013 compared to several indices including the Dutch in orange, the MSCI Europe Professional & Commercial Services Sector Index in black, and the EURO STOXX Media Sector in green. As detailed in the table, over the three-year period to December 31st, 2019, Wolters Kluwer shares increased 89% in value, more than 3x the performance of the Dutch AEX and more than 2.5 x the performance of the MSCI Europe Professional & Commercial Services Index.
We will see what 2020 holds, but I'm pleased to see that we are now widely perceived as a high-quality investment and that the share price has held up well compared to the market as a whole. Over the long term, we will, of course, create value for our customers and our employees. We aim to make progress on this front every year. Our employees remain highly engaged, and last year, we even notched up our employee engagement score to 77%. This metric is generated by an independent provider, and it is noteworthy that we continue to beat the standard for high-performing companies. We place great importance on our annual employee compliance training programs, which include IT and data security training. We have nearly 100% participation among our employees for these programs. We continue to manage ESG risks in our supply chain.
In 2019, we made further progress on increasing the number of vendors that are committed to the Wolters Kluwer Supplier Code of Conduct or an equivalent standard. Let me sum up and make a few comments on the first quarter. In summary, our 2019 financial performance and strong financial position is currently providing a solid foundation for the year ahead as we navigate COVID-19 challenges. We will continue to support our customers on the front line in health, but also in our other markets of tax and accounting, governance, risk and compliance, and legal and regulatory. We have quickly adapted our way of working to ensure the safety of our employees and provide business continuity. The strategic objectives of scaling our expert solutions, advancing our information products and services, and driving operational agility remain our long-term focus.
2019 was a good year in which we delivered 4% organic growth and improvement in margins, free cash flow, and return on invested capital. We returned over 70% of adjusted free cash flow to shareholders. Our first quarter performance was solid, organic growth was 4%, and we delivered margin improvement. Further details on our first quarter performance will be provided in our scheduled first quarter trading update on May 6th. Thank you for your continued support as a shareholder in Wolters Kluwer, and I will now turn the presentation back to our Chairman.
Thank you for this presentation, Nancy. Mrs. Horan, Chairman of the Selection and Remuneration Committee, will now briefly introduce the new agenda item 2C, the advisory vote on the remuneration report as included in our 2019 annual report. This agenda item is submitted to you for an advisory vote in accordance with the Dutch law implementing the amended European Shareholders' Rights Directive. By voting, you can indicate whether you believe the remuneration report provides a clear and comprehensive overview of all remuneration awarded or due to individual members of the Executive Board and Supervisory Board over the last financial year. In connection with this item, I would like to refer to the remuneration report, which can be found on pages 68- 80 of the annual report, and to explanatory note 38 of the financial statements, which can be found on page 73 of the annual report.
Now, Mrs. Horan is joining us by audio conference as she currently is in the United States. Jeanette, the floor is yours.
Thank you, Frans. I would indeed like to briefly explain the way the Selection and Remuneration Committee executed the remuneration policy in 2019 and early 2020. The remuneration for 2019 and therefore the 2019 remuneration report are based on the current remuneration policy, which was approved by shareholders in 2004 and amended with the consent of shareholders in 2007 and 2011. As Frans explained, this is the first year we are submitting the remuneration report to the AGM for an advisory vote. It is noted that the Netherlands is one of the two countries in the EU for which this obligation came into force this year already. With respect to the payout over 2019, I would like to make the following remarks. The quantum of CEO pay has been driven by strong performance in recent years.
2017- 2019, Wolters Kluwer delivered an absolute total shareholder return of 100% compared to an average of only 39% for AEX constituents and 28% for EURO STOXX 600 constituents. In years when Wolters Kluwer's performance was not as strong, the quantum of executive board pay was very significantly lower. This strong link between performance and pay remains a key part of our proposed remuneration policy. Remuneration at target for the executive board is currently aligned to the median of the pay peer group and is designed so that the actual payout is highly dependent upon the performance of the company, with approximately 80% of CEO pay tied directly to results and relative to returns to shareholders. Apart from modest base salary adjustments aligned to those of our broader employee population, Wolters Kluwer has not changed CEO target pay in more than a decade.
With respect to the composition of the peer group, I would like to add the following. Given that more than 60% of Wolters Kluwer revenue and employees are based in the U.S., the Supervisory Board believes the remuneration at target for Wolters Kluwer executive board members should be based on current market data for a remuneration peer group that includes both European and North American companies of similar size, geographic footprint, and business and industry complexity. The blended European and North American peer group approach that is in place at Wolters Kluwer is representative of the talent market from which the committee would recruit future executive board members and was approved by shareholders in 2004 and confirmed in 2007 and 2011. Feedback received from many of our leading shareholders is supportive of including North American comparable companies in our peer group.
We do not believe the peer group should be driven by a company's country of legal registration and stock market listing. At the request of shareholders and in line with the implementation of the amended European Shareholder Rights Directive in the Netherlands, we have made several enhancements to our disclosure, including listing the remuneration peer group in the 2019 annual report and an overview of the remuneration of board members over the last five years. We will continue to monitor the evolution of the EU disclosure guidelines, and once finalized, we will review the remuneration report as appropriate. Now, let me discuss the outcome of the remuneration for 2019. The first element of our remuneration policy is the base salary. In 2019, the Executive Board members received a regular base salary increase of 2.5%.
In 2020, the Executive Board members will receive a regular base salary increase of 2.5% again, which is in line with the overall salary increases within Wolters Kluwer for executives globally. The second element of our remuneration policy is the short-term incentive plan. Under this plan, payouts are based on performance to target for each plan measure. There is no payout for performance less than 90% of target on a given measure. A maximum payout is achieved for performance at 110% of target for each plan measure. Each year, the Supervisory Board sets the plan targets for the next year. In 2019, these targets were based on the following metrics: revenue performance, adjusted net profit, adjusted free cash flow, and revenue from digital products as a percentage of total revenues. These metrics are important performance indicators for our company.
As such, by using these metrics, we feel that we align the interests of our company and its stakeholders with the performance of our executives. For performance on target, Ms. McKinstry could earn 125% of her base salary under the short-term incentive plan, and Mr. Entricken, 95%. In 2019, the performance for revenue was on target. The performance for adjusted net profit and adjusted free cash flow was above target, and the performance for revenue from digital products was slightly below target. As a result, the payout percentages for 2019 were higher than the on-target numbers: 130.67% for Ms. McKinstry and 100.67% for Mr. Entricken. The third element of our remuneration policy is the long-term incentive plan. According to this plan, the executive board members can earn performance shares depending on the company's performance over a three-year period.
There are two targets we use: relative total shareholder return and diluted earnings per share. The number of shares that executive board members earn fully depends on the performance against those targets during the three-year performance periods. The calculations are verified by the external auditor. Relative total shareholder return means the performance of our share price compared to that of 15 peer group companies. For the performance period 2017- 2019, our company reached a third position. As a result, the executive board members were entitled to 125% of the conditional number of RTSR-related shares that were awarded to them in 2017. With respect to diluted earnings per share, the target was based on a three-year compound annual growth rate, meaning year-on-year growth for diluted earnings per share of 10.4%.
Because the company outperformed that target with a diluted EPS of 14.8%, the Executive Board members were entitled to 150% of the conditional number of EPS-related shares that were awarded to them in 2017. The shares earned under the 2017 to 2019 long-term incentive plan were released to the Executive Board members at the end of February 2020. I hope this short explanation helps you in understanding the execution of our remuneration policy as explained in our remuneration report. Thank you, and I will hand back to you, Frans.
Thank you, Jeanette. Before we come to questions, we now have a third speaker, Mr. Dielissen of Deloitte, our external auditor. Mr. Dielissen will now briefly explain Deloitte's work in relation to the 2019 audit. Mr. Dielissen, who is joining us today remotely, the floor is yours, Ben.
Thank you, Frans. I welcome this opportunity to provide some additional information on our audit work that has resulted in an unqualified auditor's opinion on the 2019 financial statements of Wolters Kluwer. Deloitte in the Netherlands has managed the group audit centrally. Our group audit mainly focused on significant group entities. Our foreign Deloitte offices have audited the significant components, which are located in North America and Europe. We, as Deloitte Netherlands, have audited the Dutch components. Deloitte in the Netherlands directed the planning review to work performed by the component auditors and assessed and discussed the results and findings with the component auditors during conference calls, online reviews, and site visits. Our scoping has resulted in a coverage of 81% of revenues, 98% of consolidated operating profits, and 91% of total assets.
On the remaining components, a combination of analytical reviews and specific audit procedures were performed by the group audit team. The materiality for the financial statement as a whole was set at EUR 50 million, which is equal to 2018. The materiality is based on 5.8% of the profit before tax. The materiality that was applied by the components did not exceed EUR 19.25 million, and we agreed with the Audit Committee that misstatements in excess of EUR 2.5 million, which are identified during the audit, would be reported to them and management. Our key audit matters have been summarized on pages 190-192 of the annual report. These key audit matters were internal controls over financial reporting, revenue recognition, valuation of goodwill and acquired intangible assets, and accounting for complex current and deferred income taxes.
During the year, we have regular meetings with the Executive Board and the Audit Committee. We also met with the Supervisory Board. We report three times a year to the Executive Board and the Audit Committee. We've issued a report to the Audit Committee and a management letter. We have read the other information as included in the annual report. We concluded that this information is consistent with the financial statement and does not contain material misstatements and contains the information as required by part nine, book two of the Dutch Civil Code. As a final personal note, I would like to mention that after five years as responsible audit partner for Wolters Kluwer, I will have to rotate off. This is a requirement of Dutch law.
I would like to thank Nancy and Kevin for the professional way my team and I have been working with you and your staff over the last five years. My team enjoyed and still enjoys auditing Wolters Kluwer. Key factors in this are the people of Wolters Kluwer they are working and interacting with. My successor for the 2020 audit will be Bas Savert, one of my fellow audit partners. That was it, Frans. I think back to you.
Thank you, Ben. Given your lead partner rotation, we also thank you for your expert involvement over the past few years, and we look forward to working with your successor, Bas Savert. Now, we would like to answer the questions relating to this agenda item that have been provided by shareholders in advance of the meeting, and that concerns the report of the Executive Board, the report of Supervisory Board, the remuneration report, and 2019 financial statements. I will now read out the relevant questions and then allocate answers to relevant people. The first question comes from the VEB, and it goes as follows.
Hospitals are currently struggling with declining income from their traditional activities, and at the same time, they are purchasing new medical materials in their fight against COVID-19. This is expected to result in pressure on hospital budgets in the near term. The question is, what consequences do you expect this will have for Wolters Kluwer's health division? I think this is a question for Nancy to answer.
Thank you, Frans. We serve many hospitals, ambulatory care facilities, and other healthcare providers around the world. You are right that they are on the front line of this global crisis, which is placing enormous demands on their time and budgets. We are providing support where we can, and as I mentioned in my talk earlier, we are providing free access to UpToDate and other resources to non-subscribers. In the short run, we expect to see fewer new sales or upsells in the health segment, but remember that our business is underpinned by subscription revenues, and due to current high usage, we expect renewals to hold up well.
The next question grouped together from the VEB goes as follows. Wolters Kluwer expects the adjusted operating margin in legal and regulatory to improve this year. The question is, do you expect the margin to recover to the 2018 level, or could the progression be higher? Is it realistic to assume that the margin difference between legal and regulatory and the other divisions can be reduced? I think this is a good question for Kevin.
Thank you, Frans. In our February outlook, we did indicate that we expect the legal and regulatory margin to improve in 2020. In the long run, we continue to believe that we can raise the level of profitability in this division. Due to the near-term impact of COVID-19, it's difficult to quantify matters with great precision, and we're still evaluating several possible scenarios and will update the market when we have greater clarity. This division indeed does have margins that are below the others in Wolters Kluwer. While we think that over the long run, the margin can improve, we expect it will never be as high as the other divisions due to the fragmented nature of legal information markets in Europe with different local laws and languages. Thank you, Frans. I'll hand it back to you.
Thank you, Kevin. Now, the next question from the VEB again is, in the past year, Wolters Kluwer saw ROIC improve significantly. For this coming year, you expect a more moderate improvement. Now the question, do you expect the rate of improvement to level off in coming years, for example, due to higher investment? I guess, Kevin, that's also for you to answer.
Thank you, Frans. ROIC has improved steadily over the past five years as a result of accelerated organic growth and increasing operating margins, but also due to lower benchmark tax rate. In the long run, we expect to drive further improvements in growth, operating margin, and it remains to be seen what will happen with tax rates as we move forward. In addition, ROIC can be impacted by the timing of divestitures and acquisitions in the year. While it's difficult to be precise about the short term, we are aiming to increase ROIC over the long term. Thank you, Frans.
Yeah, thank you, Kevin, for that answer. The next question again from VEB is as follows. In May of last year, Wolters Kluwer suffered a cyber attack. The question is, what measures have we been taking to prevent a repetition? I guess that's a question for Nancy.
Thank you, Frans. Cyber attacks are unfortunately too common these days. Many organizations face these attacks on a daily basis. I'd like to remind you that due to the alertness and proactive response of the Wolters Kluwer IT team, we prevented a data breach. To be clear, no data was taken, and this was verified by independent experts. We have already trained and prepared for these types of incidences and will continue these initiatives. In addition, we have further strengthened our security systems. Thank you, Frans.
Thank you, Nancy. We now turn to questions from Eumedion, and on behalf of Mr. [Kautems], representing Achmea, and also on behalf of Robeco and APG Asset Management, we have the following questions. There is a first statement and then the questions. As a large provider of information service in the field of legal and regulatory, tax and accounting, health, and financial compliance services, many companies are dependent on the digital services offered by Wolters Kluwer for the continuity of their work and businesses. Now the question, what operational consequences does Wolters Kluwer experience due to the limitations because of COVID-19? One, how does Wolters Kluwer protect the safety of its employees? Two, what challenges does Wolters Kluwer experience in the execution of critical business processes?
Three, has there been any issue at any moment since March 12 with the accessibility, security, and continuity of the Wolters Kluwer network? Four, does the digital infrastructure of Wolters Kluwer need structural improvements to ensure the continuity going forward? If yes, which ones? I guess, Nancy, that's a question for you.
Thank you, Frans. Our first priority is the health and safety of our employees and our communities. Our global work-from-home policy implemented in mid-March allows nearly all of our employees to protect themselves by isolating themselves and their families at home. For colleagues who need to be on site at our offices, there is a lot more space per employee, enabling social distancing. In addition, we have provided masks, gloves, antibacterial gel for these employees working on site. Before moving to our work-from-home status, we increased the capacity and redundancy of our networks in some locations to handle the increased online working. We have made significant investments in systems over the years, and we are a digital business, which has made this transition relatively smooth. The security of our networks has been maintained at the highest standard throughout. Thank you, Frans.
Thank you, Nancy. The next question, again from Eumedion on behalf of Mr. [Kautems], that's a text question, and it goes as follows. When will Wolters Kluwer start reporting on country-by-country basis? We would like to understand why you are not doing that yet. Kevin, that's in your domain.
Thank you, Frans. Wolters Kluwer does report its tax position on a country-by-country basis to the tax authorities in the jurisdictions that have included this reporting requirement in local legislation. Wolters Kluwer follows IFRS standards and other legal rules when disclosing financial information in the public domain. As disclosing tax payments to the governments of countries where we operate, it is not mandatory under these rules, and we have not disclosed this. We will include country-by-country reporting in our annual reports when reporting requirements require that we do so. It should be noted that Wolters Kluwer operates in 40 countries throughout the world, and we do pay taxes in all the countries that we operate. Back to you, Frans.
Okay, Kevin, thank you. We now turn to questions of BBDO, and the first question starts with a statement, and I'll start with that. Wolters Kluwer states that all products of Wolters Kluwer may have an impact on the environment and that some support in mitigating climate change. Did Wolters Kluwer also look at how its products can help to adapt to physical effects of climate change and possibly other events? BBDO would like to emphasize that technology-related and digital companies are in a position to respond positively and quickly to acute crises such as the physical effects of climate change, but also the current situation with COVID-19.
Wolters Kluwer could provide information services that support organizations worldwide in preventing and managing extreme heat or water stress, as well as products that help to protect and enhance people's health. The question is, what role can Wolters Kluwer play in climate and health-related crises? Has Wolters Kluwer made an analysis relating to the climate adaptation opportunities for current or new products and services? Nancy, that's a question for you.
Thank you, Frans. We see that our company can certainly play a role in climate and health-related crises. Our expert solutions help professionals manage disruption. We provide solutions for those who work as health practitioners, but also professionals in health, tax, legal, and environmental health and safety fields. Regarding COVID-19, we are providing support where we can, and as I mentioned in my talk earlier, we are providing free access to UpToDate and other resources to non-subscribers.
In relation to the climate adaptation opportunities, as part of our strategy, we actively focus on an increase of revenues from digital solutions and services, which represent 89% of our total revenues in 2019. Our digital products and services bring a more efficient use of resources. Content is updated while the same product or service can continue to be used. Also, through our product impact portfolio, we measure the environmental impact of our key products. Through risk reviews and materiality analysis, we assess how relevant environmental risks are for the company. Based on these, we do not expect climate change to pose a significant risk to the success of the company, nor is it identified as a material issue. We keep monitoring developments and continue taking actions to limit our environmental impact. Thank you, Frans.
The next question from BBDO starts with a compliment, and I will read it as follows. BBDO would like to compliment Wolters Kluwer on adding sustainability-related questions to its due diligence questionnaire this year. BBDO has not been able to find information in Wolters Kluwer public reporting relating to the implementation, as well as the outcomes of both the risk management and due diligence screenings of its suppliers. The question is, would Wolters Kluwer be willing to map its supply chain in order to create an overview of the risks, low, medium, or high, and vulnerable groups regarding labor conditions in its supply chain? Additionally, would Wolters Kluwer be willing to communicate to its stakeholders about strategies to prevent and to mitigate risks for bad labor conditions in the supply chain related to specific regions or vulnerable groups? Again, that is a question for Nancy.
Thank you, France. Wolters Kluwer is continuously looking to improve its due diligence of its supply chain. In our third-party risk program, we assess our suppliers into four categories of inherent risk, from very high to low. The suppliers are assessed based on the various risk areas. Our centrally managed suppliers in the three highest risk categories receive the sustainability questionnaire as part, and as part of that, they are asked to sign our supplier code of conduct or confirm commitment to an equivalent standard, which covers labor conditions and commitment to frameworks such as the UN Global Compact. Thank you, Frans.
Thank you, Nancy. Now we turn to BBDO question three. Wolters Kluwer has drawn up a diversity profile and developed a diversity policy for both the company's boards and division CEOs based on the minimum target of 30% male and 30% female representation. However, BBDO would like to see a diversity profile and policy that covers the entire workforce of Wolters Kluwer. Besides that, BBDO considers the theme of diversity to be more comprehensive than just gender balance. Now the question, would Wolters Kluwer be willing to develop and report on a comprehensive diversity profile and policy for the entire organization, including all marginalized groups? Nancy, I guess that's for you.
Thank you, Frans. We report on gender diversity rates for our entire organization in our annual report. Over 2019, 47% of our employee population was female, and 39% of our managers are female. We are proud of these numbers, which express that diversity within Wolters Kluwer is an important theme. As stated in our business principles and human rights policy, we aim to create equal opportunities for all employees, regardless of factors such as race, gender, nationality, age, health or physical disability, ethnic background, and more. We are determined to maintain an inclusive and diverse workforce and will continue to focus on diversity, not only in terms of gender, but other elements such as nationality, age, and expertise. Thank you, Frans.
Indeed. Now we turn to BBDO question four. In 2019, Wolters Kluwer has received two awards from business media outlet Forbes for its performance in the field of gender equality in the US. Firstly, America's Best Employer for Women and America's Best Employer for Diversity. BBDO congratulates Wolters Kluwer with these awards and performance. These achievements are a recognition of gender equality being a topic of paramount importance within the company. However, practice shows that women are often still disadvantaged compared to men. For instance, in the European Union, women are paid approximately 16%, one-sixth percent less on average than men. Now the question, would Wolters Kluwer be willing to identify and report on the gender pay gap for different working levels within the company? Nancy, over to you.
Ensuring pay equity is an important consideration in how we reward employees, and as a matter of practice, we do review pay in light of experience and expertise across similar roles. Monitoring pay practices to ensure we do not have a disparate gender impact is something we will continue to do. Thank you, Frans.
Thank you, Nancy. We now come to questions regarding agenda item 3A, which is the financial statements 2019 and the dividend. I will again start with VEB questions. First, the statement, and then the questions. The leverage ratio of the company has been below target of 2.5 for several years. The gap between the actual leverage and the target keeps widening. Why do you keep this target, and what possibilities do you see to move towards two and a half target without ignoring the objective of creating long-term value? That's a question for our Finance Director. Kevin.
Thank you, Frans. We've had this leverage target of two and a half times net debt dividend for many years. We see this as a long-term average level target, and we will deviate from it from time to time. Some years ago, our leverage was above the target over three times, and in recent years, we've been below the two and a half times target. We keep this target because we believe Wolters Kluwer business has improved as we have become more digital, more subscription oriented, more focused, and we believe the business can handle a financial leverage target of 2.5x as we have in the past. With the current uncertainty around COVID-19, we're particularly pleased to have this strength in the balance sheet that we have today. Thanks, Frans.
Okay, Kevin. I can warn you that the next two questions are also for you, so be prepared. Next question from the VEB. The cost of capital applied to Goodwill Impairment Testing has been reduced to 8%, with a range of 6%-17%, and previously, this was 12% on average. The question now, is this pretext WACC not too low? Why do you believe that the low WACC is a correct proxy for the expected return on capital against which investors are willing to provide capital, and thus being a reasonable basis for determining the headroom for impairment testing purposes? Kevin, please.
Yes. In our impairment test, the estimated pre-tax cash flow are discounted to their present value using pre-tax weighted average cost of capital between 6.2% and 16.7%, with a weighted average of 8.2%. The WACC is determined as of June 30th, 2019. At that time, Wolters Kluwer and its peer group had a relatively low beta, and it is an important determinant of the cost of equity and low risk-free rates, another important variable in the WACC determination. Note that the risk-free rate and the perpetual growth rates are communicating vessels in the impairment test. A low interest rate results in a low WACC, but also a lower perpetual growth rate. As a consequence, the positive impact of a low interest rate is offset by the negative impact of lower perpetual growth rates. As such, we believe we applied sufficient prudence in our impairment test.
In addition, the WACC used in our impairment test were in the mid-range of the outcome set by external valuation firms and deemed reasonable by our auditor. Currently, it's expected that in 2020, the market risk premium used for the calculation will go up, and thus WACC, giving an increase in certainty and volatility in the market. Thank you, Frans.
Thank you, Kevin. We now come to the last question before we start to vote, and the last question again is from the VEB, and it goes as follows. What were the observations on internal controls over financial reporting that were identified by the external auditor? Guess that's a question for management to answer. Kevin.
Yes. The findings, observations, and recommendations in Deloitte's management letter were intended to assist the Audit Committee and the Executive Board in the ongoing process of improving the company's internal control environment. We always welcome any observations from Deloitte, which are taken seriously by the management team, and we aim to resolve any issues as soon as possible. As in the prior years, the main control areas Deloitte looked at were top monitoring controls and IT general controls. Though there were some general IT control items identified, none of them were identified by Deloitte as significant deficiencies in the individual level. This also means that none of the issues identified had a significant impact on the audit approach or the 2019 financial statements as a whole. Back to you, Frans.
Okay, Kevin. Thank you for that, and thank you to our shareholders for your questions and comments. Before we proceed to vote, I will pass on the notary's formal observations, which I received, and I can say that before the meeting, 3,527 shareholders submitted a total of 197,131,482 votes to the notary by proxy, and that is about 74% of the total. The notary is nodding her head. Yes, that's fine. This means that I now propose to acknowledge the report of the executive board and the report of the supervisory board for the record. As far as agenda item 2C is concerned, the remuneration report that is included in our 2019 annual report will now be submitted to you for an advisory vote. After each vote, you will see the results on the screen, and we will share the voting results for those attending.
These results are based on the votes cast by written or electronic proxies holding voting instructions to the notary, Mrs. Joyce Leemrijse of Allen & Overy, which I introduced before. You are now asked to approve the annual 2019 remuneration report in the sense of an advisory vote. You can vote in favor of the proposal, vote against the proposal, or abstain from voting. I declare the voting open. I declare the voting now closed. The result is as follows: 53% has voted in favor, and therefore the 2019 remuneration report has been approved. Thank you for that. I now propose putting agenda item 3A, the proposal to adopt the 2019 financial statements on the vote. Would the voting operator please activate the system? I declare the voting open. I declare the voting closed.
The result is as follows: 100%, and that is rounded, 100% of the votes have been cast in favor of this proposal. I hereby confirm that the 2019 financial statements have been adopted. On behalf of the entire Supervisory Board, I would like to express our appreciation to the Executive Board and all employees for the management pursued and work performed in the year 2019. We now move to the dividend policy, the dividend situation. That is agenda item 3B, the dividend policy, and agenda item 3C, the proposal to pay a total dividend of EUR 1.18. The company has a progressive dividend policy. This means we aim to pay a higher dividend amount each year than in the previous year. The annual increase depends on factors such as financial performance, market conditions, and the need for financial flexibility.
It is also part of our policy to pay an interim dividend every six months. After issuing the agenda, we have carefully reviewed the financial situation of the company in the light of the COVID-19 situation, and we feel confident that the company can indeed pay out the dividend as planned without liquidity risks. I also refer in this respect to the earlier presentation of Nancy McKinstry in this respect. Now, in line with our progressive dividend policy, as you know, we propose a total cash dividend of EUR 1.18 per share for the financial year 2019. This represents an increase of EUR 0.20 compared to last year and amounts to a rounded percentage increase of 20%. Since an interim dividend of EUR 0.39 was already paid in September 2019, the final dividend payable in May 2020 will amount to EUR 0.79.
Upon your approval of the dividend proposal for 2019, this will be the 14th consecutive year in which the company will pay a higher dividend under its progressive dividend policy. For more than 25 consecutive years, the company has paid either a higher dividend or the same dividend as in the previous year. With respect to the effect from the 2018 financial statement, the interim dividend has been increased, as you know, from 25% to 40% of the total dividend. We have received no questions with regard to this agenda item, so that means that we're going to vote. I now put agenda item 3C to the vote, the payment of a total dividend of EUR 1.18 per ordinary share, resulting in a final dividend of EUR 0.79 per ordinary share. Would the voting operator activate the system, please? The voting is open.
The voting is closed. I can see the results, and the result is that 99.56% of the votes have been cast in favor, and that means that I hereby confirm that the meeting has resolved to pay a total dividend of EUR 1.18 per ordinary share, resulting in a final dividend of EUR 0.79 per ordinary share. Thank you for that. We now come to item 4 of the agenda, the proposals to release the members of the Executive Board and the members of the Supervisory Board from liability. There are separate agenda items, and we will be voting on it separately. We have not received any questions. I'm looking around. No, there are no questions on this agenda item, so we are going to vote. I declare the voting open, please. I declare the voting closed.
I'm looking at the screen, and that means that with 99.2%, the votes have been cast in favor of this proposal, and therefore the proposal has been adopted. I confirm herewith that the meeting has released the members of the Executive Board from liability for the performance of their duties. We come to agenda item 4B, releasing the members of the Supervisory Board from liability for the performance of their duties to the vote. No questions, so we're going to vote. Would the voting operator activate the system, please? I declare the voting open. I declare it closed. Okay. That's the same percentage. That means that 99.2% of the votes have been cast in favor of this proposal, and therefore the proposal has been adopted. I hereby confirm that the meeting has released the members of the Supervisory Board from liability for the performance of their duties.
I thank the shareholders for these two decisions. We now come to agenda item 5, the composition of the Supervisory Board. As you could read in the explanatory notes to the agenda, Mrs. Russo retired at the end of 2019 due to other commitments. Mr. Hooft Graafland will retire from the Supervisory Board after expiry of his second term of office, which is today. Mr. Hooft Graafland was first appointed in 2012 and reappointed in 2016. René, on behalf of the Supervisory Board, through this means, I wish to thank you for your valuable contributions to the Supervisory Board and your excellent chairmanship of the Audit Committee. René has diligently used his knowledge of managing large international companies, strategic insight, and financial background for the benefit of the company and the Supervisory Board. Thank you, René.
We wish you great success with all your other work, and we hope to bid farewell to you in person later when things are more normal. Due to the retirement of Mr. Hooft Graafland today and Mrs. Russo at the end of 2019, you will have seen that we are nominating two new candidates for the Supervisory Board today, and they are Jack de Kreij and Sophie Vandebroek. We are delighted that these excellent candidates are available to join the Supervisory Board. Once they are appointed, Jack de Kreij will succeed René Hooft Graafland as Chairman of the Audit Committee, and Sophie Vandebroek will become a member of the Audit Committee. Ann Ziegler, my colleague, will take up the role of Vice Chairman of the Supervisory Board after René Hooft Graafland retires. Further, Jeanette Horan's first time of office expires today, and she is available for reappointment.
As you know, Jeanette is Chairman of the Selection and Remuneration Committee, which deals with remuneration matters, and she also brings international experience and IT and cyber security expertise to the table. You have been able to learn more about the backgrounds of Mrs. Horan, Mr. de Kreij, and Mrs. Vandebroek in the explanatory notes to the agenda and the more detailed résumés of the candidates that have been made available. After this brief introduction to the composition of the Supervisory Board, I now come to agenda item 5A, and that is the reappointment of Mrs. Jeanette Horan as a member of the Supervisory Board as from today, April 23rd, 2020, for a second four-year period ending after the General Meeting in 2024. Let's see. Just a moment. Yeah.
We have received the following question in advance of the meeting, and I'm going to read that to you, and that is as follows. That is a question from the VEB. It's a statement, actually. Yeah, that's a statement. The statement goes as follows with regard to the proposal to reappoint Mrs. Horan, and it goes as follows. Mrs. Horan, in her capacity of Chairman of the Selection and Remuneration Committee dealing with remuneration matters, is primarily responsible for the remuneration policy for the Executive Board and Supervisory Board. The VEB finds itself compelled to vote against the proposed remuneration policies for the Executive Board and for the Supervisory Board, but that's an item of the next agenda item. Therefore, the VEB will refrain from voting for the reappointment of Mrs. Horan since she plays an important role in this inadequate remuneration system.
That is the statement of the VEB. That's not a question, that's a statement, and I think on a personal basis, I would like to give a reaction to that. I believe that Mrs. Horan continues to contribute to a high level to the effective governance of this company, and her prior experience as technology executive in a larger global multinational, coupled with her pragmatic approach overall, continue to be instrumental to me and the Supervisory Board and the committee and to her leadership of this committee. I will leave it at that. There now are no further questions, and that will mean that we're going to vote on item 5A, the reappointment of Jeanette Horan, and I'll put this to the vote. Would the voting operator activate the system, please? Voting is open, and the voting is now closed. We see the percentages.
Yes, 92.4% rounded of the votes have been cast in favor of this proposal. That's very good, and I hereby confirm that the meeting has reappointed Jeanette Horan as a member of the Supervisory Board as from today, April 23rd, 2020. Congratulations, Jeanette, with your second term, and I look forward to continued excellent cooperation. We now come to the appointment of Mr. Jack de Kreij as a member of the Supervisory Board. As you can see, we go in alphabetical order. For a four-year period as from today, April 23rd, 2020, and that ends in the AGM in 2024. Before we go into vote, I would like to give Jack de Kreij the floor for a brief introduction. Jack, please.
Thank you, Frans. It's a sincere pleasure to introduce myself shortly to you all today. First of all, I'm honored and excited being nominated as member of the Supervisory Board of Wolters Kluwer and Chairman of the Audit Committee. Wolters Kluwer has been going through an impressive digitalization transformation with a well-recognized, long-term-focused expert solution growth strategy, which I deem both inspiring and intellectually challenging. As in every organization, people make the real difference. Up to now, I had the pleasure to meet several times personally with Nancy, Kevin, and Frans, my other colleagues of the Supervisory Board, and some leaders at the corporate office. Based on those conversations, I can tell you that I experienced, besides a fully aligned strategic business focus, a lot of enthusiasm, professionalism, and a great team spirit.
Over the last 40 years, I gathered international management experience at global companies in various industries in different leadership positions as international order partner, managing partner of merger and acquisitions, related transaction services, Executive Board member, CFO, Vice Chairman, private equity investor, and of course, as member of the Supervisory Board of other leading companies. I aim to contribute these continuing evolving experiences in a fit-for-purpose way to the Wolters Kluwer organization, supported by effective collaboration, diversity of perspectives, and great teamwork. From a more personal perspective, I can share with you that I'm living in the Netherlands and that I truly enjoyed my different international working environments during the last 40 years.
Two years ago, I started a new non-executive phase of life with a portfolio of various business and social activities, all characterized by, amongst others, people development and long-term focused value creation, combined with some more quality time for family, friends, traveling, sporting activities, and my board membership at a charity fund. Becoming part of the Supervisory Board of Wolters Kluwer is not only an interesting and exciting opportunity, but it also feels as a natural fit with inspiring people. I thank you very much for your attention, and I wish you all good health.
Thank you, Jack, for your very stimulating words. There are no questions with regard to the appointment of Mr. de Kreij, and that means that we are going to vote. Could the voting operator activate the system, please? Declare the voting open. Yeah, the voting is closed, and we are looking at the figures. Yes, we have 95.9% of the votes in favor, and I hear it's confirmed, therefore, that the meeting has appointed Jack de Kreij as a member of the Supervisory Board as from today, April 23rd, 2020. Congratulations, Jack, on your appointment, and I look forward, in this respect, to working with you again. We come to item 5C, the appointment of Mrs. Sophie Vandebroek as a member of the Supervisory Board as from today, April 23rd, 2020, for a four-year period ending after the Annual General Meeting in 2024.
Of course, we would also like to give the floor to Mrs. Vandebroek for a brief introduction. Sophie, please.
[Foreign language] . When I considered joining a board, I asked myself the following questions: Will I work with great people? Am I passionate about the company's mission and products? Are the company's values aligned with mine? Number four, can I make valuable contributions? In Wolters Kluwer's case, the answer to all four of these questions is yes. Throughout the interview process, I had the pleasure to meet with Nancy, Frans, and Jeanette in person and talk with all other Supervisory Board members by phone. I am grateful for the time you spent with me. Wolters Kluwer truly has an exceptional CEO and a top-notch Supervisory Board. Yes, I would love to work with you. With regards to my second question, I admire Wolters Kluwer's long history of pioneering and providing expert advice to professionals.
I am passionate about the company's mission of protecting people's health and prosperity and contributing to a more safe and just society. I'm also immensely impressed with how Nancy and her team have successfully transitioned the business model from selling printed books to offering expert information in a fully digital fashion. In hindsight, this might look easy, but as I know from painful personal experience, such a transition is extremely hard. Many companies fail at it. What is very attractive about joining the board at this point in time is that Wolters Kluwer is now embarking on a second challenging transformation, one that is creating expert solutions that provide real-time valuable insights to professionals. Yes, without a doubt, I'm passionate about the company's mission and products. As to my third question, my values and the organizational values do align.
Throughout my career, I have been passionate about innovation and diversity. Wolters Kluwer's commitment to innovation and long-term strategic investments is impressive. I also very much admire Nancy's commitment to diversity. I've learned that the most inclusive teams are also the most innovative. They create stronger relationships with clients and deliver better business results. Related to my last question, I do believe I can make valuable contributions to the company. I have over two decades of executive-level operational experience at global technology companies, including IBM and Xerox. I have served as a director on public company boards, including the past seven years on IDEXX Laboratories board. As a former Chief Technology Officer, I have extensive experience with creating and applying innovative technologies to drive revenue and profit growth.
I believe that this experience will be of value as Wolters Kluwer continues its journey towards becoming an expert solution provider. This is a journey that will leverage automation, artificial intelligence, and other advanced technologies with which I'm quite familiar. As you can see, the answer to my four questions is an unquestionable yes. Finally, from a personal perspective, I was born and raised in Belgium. Dutch is my mother tongue. I left the United States almost 35 years ago to get my doctorate degree in engineering and stayed here ever since. I live in Boston, but I've been coming to Europe several times a year to visit my mother in Belgium and more recently to visit my oldest daughter, who now lives in Rotterdam. Joining the Wolters Kluwer Supervisory Board is a fantastic reason to come to Europe even more frequently.
It is indeed a great honor to have been nominated to the Supervisory Board, and I'm thrilled at the prospect of joining it. I look forward to working with Nancy and the board as the company continues to successfully execute its very important mission. Thank you very much for your trust. France, back to you.
Thank you, Sophie, for that very good introduction of yourself. There are no questions related to this agenda item. Therefore, we're going to vote, and I now put the agenda item 5C, the appointment of Sophie Vandebroek, to the vote. Would the voting operator activate the system, please? I declare the voting open. It is now closed. The voting is now closed. Yes, we have the results. 99.7% of the votes are in favor. Very good. I hereby confirm that the meeting has appointed Sophie Vandebroek as a member of the Supervisory Board of Wolters Kluwer as from today, April 23rd, 2020. Congratulations on your appointment, Sophie, and I look forward to working together with you. We come to the next agenda item, and that is agenda item 6.
In accordance with the implementation of the amended European Shareholders' Rights Directive in the Netherlands and with the Articles of Association, the Supervisory Board submits a remuneration policy, including the conditions of the long-term incentive plan, for the Executive Board to the meeting for adoption. Subject to the approval of the meeting, this remuneration policy will take retroactive effect from January 1, 2020, and is intended to remain in force for four years. The Supervisory Board determines the remuneration and other employment conditions of the members of the Executive Board with due observance of this remuneration policy. Different from other European countries, where a majority vote is required for adoption, in the Netherlands, this voting item requires a 75% majority. I would now like to give Mrs. Horan the floor. Again, Jeanette, to briefly explain the proposed remuneration policy for the Executive Board.
Thank you, Frans. Over the past year, the Supervisory Board has engaged with our independent external advisor to review the Executive Board remuneration policy with several objectives in mind. First, maintaining a strong relationship between Executive Board pay and the creation of shareholder value. Second, complying with the requirements of the Dutch legislation implementing the European Shareholder Rights Directive. Third, reflecting current best practices in the market. We consulted with our leading shareholders, representing approximately 35% of shares outstanding, about the changes we are proposing in the policy. For the Short-Term Incentive Plan, we are introducing a predefined list of financial and non-financial measures from which the Supervisory Board can select annually. For the Long-Term Incentive Plan, we are proposing three changes. The first, introducing formal share ownership requirements.
For the CEO, a minimum value of three times base salary must be held, and for other Executive Board members, a minimum value of 2x base salary must be held. Second, introducing a two-year holding period post the three-year vesting period for LTIP performance shares. Third, reducing diluted EPS by diluted adjusted EPS as one of the two performance measures in the plan. In addition to these proposed changes, we have revised the peer group for the RTSR performance measure in the long-term incentive plan to reflect the transformation of the company. Seven media and publishing companies in the group have been replaced by research and consulting companies, which now closely aligns the RTSR peer group with the pay benchmarking peer group. There are no proposed changes to the pay design for the CEO.
Other than the modest annual salary increases aligned to the broader employee population, there have been no increases to CEO pay in more than a decade, and the policy makes no provision for increases without shareholder approval. With the proposed changes, the policy remains very tightly linked to company performance and your interests as shareholders. To drive pay-for-performance, over 75% of executive board pay is tied directly to results and relative returns to shareholders. In line with advice from top shareholders, we are keeping the weighting of financial measures high, at least 60% in the short-term incentive plan. Starting in 2020, the Selection and Remuneration Committee will also be evaluating a range of ESG measures to potentially be added to the list of possible short-term incentive plan measures for future years.
The proposed change from basic EPS to adjusted EPS in the long-term incentive plan brings us in line with market practice, enabling us to more easily benchmark against peers and will allow us to align our internal and external communication on the outlook. To strengthen the link between pay and shareholder interests, we continue to have a majority of incentive pay and performance shares directly tied to shareholder value creation. We have seen the desired results from this approach. In the period 2017- 2019, Wolters Kluwer delivered an absolute TSR of 100% compared to 39% for AEX and 28% for EURO STOXX 600. In past years, when company performance was less strong, the quantum of executive board pay was very significantly lower. As previously mentioned, we are proposing share ownership requirements and a two-year post vesting holding period for the long-term incentive plan.
Finally, we need to remain competitive in the global market for talent. The overall pay target for the Executive Board continues to be aligned to the median of our pay peer group, as validated by data provided by our independent external advisor. We maintain a pay peer group comprised of a blend of European and North American companies, which the Supervisory Board believes is appropriate, given that more than 60% of revenues and employees are based in North America, along with the vast majority of our competitors, large and small, and that both regions represent the talent market from which we would recruit future Executive Board talent. Thank you, Frans. I'll hand back to you.
Thank you, Jeanette, for that introduction. We now have indeed some questions. We actually start with a statement from the VEB, and then we have some questions from Eumedion. Let me start with the statement of the VEB. It goes as follows. One of the aspects of the remuneration structure of Wolters Kluwer is the wish to be benchmarked against American peers that usually have an aggressive remuneration policy. With that, Wolters Kluwer chooses the wrong route in the remuneration structure and can better compare itself with European peers. In addition, improvements should be made based on indigenous factors, whereby Wolters Kluwer should review how it can improve applied parameters for the variable part of remuneration to better align this with the long-term economic value creation.
This can be easily done by selecting ROIC as a measure that much more reflects the value of the business than, for example, the profit per share. In short, the measures currently used for the variable compensation are unsound and with too low ambition level. Because of this, the already high basis remuneration level has an undesired high multiplication. The above aspects of the remuneration policy should be changed. Therefore, VEB will vote against the proposed remuneration policy. So far, the statement from the VEB, so there's not a question, but we think it's important that we still answer this point from the company's perspective. Jeanette, could you do that, please?
Yes, thank you, Frans. Our intent is to compare against peer companies that best reflect our mix of business, revenues, and global footprint. Given that, as I said, more than 60% of Wolters Kluwer revenues and employees are based in the U.S., the committee believes that the quantum of remuneration at target for Wolters Kluwer executive board members should be based on current market data for a remuneration peer group that includes both European and North American companies of similar size, geographic footprint, and business and industry complexity. Feedback received from many of our leading shareholders indicates their support for including North American comparable companies in our peer group.
We do not believe that the peer group should be defined by a company's country of legal registration and stock market listing. With regard to ROIC, we agree that it is an important measure to monitor closely, which we do, and we report on our progress. Companies that more typically use ROIC as a compensation measure are capital-intensive organizations, different from Wolters Kluwer. Further, we see ROIC increasing more slowly than the performance cycles in our LTIP and STIP programs, as we anticipate the average invested capital will be generally stable for the foreseeable future, which means the strongest driver of a change in ROIC will be adjusted net profit, which will be reflected in STIP and adjusted EPS, which will be reflected in the LTIP. Thank you, Frans.
Okay, thank you, Jeanette. The next question is actually from Eumedion on behalf of Mr. [Kautems] representing Achmea. As mentioned before, also Robeco and APG. I first will read the first part and then the question. It goes as follows on behalf of Mr. [Kautems]. In relation to the decision-making process and stakeholders' considerations, you indicate that the Central Works Council did not see added value in rendering a formal advice. We believe that the opinion of employee representatives is very valuable, and their opinion says also something about the employee engagement in relation to the new remuneration policy. Now, the question: Could you share the considerations that the Works Council gave to you not to render a formal advice? What views on the changes have they shared during the meeting with the Supervisory Board? Jeanette, please, over to you.
Thank you, Frans. During the fourth quarter of last year, we reviewed our draft remuneration policy with various stakeholders, including our top 12 shareholders, as I mentioned, that own 35% of our shares outstanding, and various corporate governance organizations such as Eumedion, VEB, ISS, and Glass Lewis. In direct response to their feedback, we included changes to our proposed policy and execution of the policy. For example, we replaced the seven companies in our TSR peer group, and we introduced the holding period and share ownership guidelines. We also had a very constructive dialogue with the Works Council, who gave us feedback on the policy, which we much appreciated.
The Works Council decided, based on those discussions, not to provide a formal written formal advice. Considering the views of the stakeholders and public opinion, the Supervisory Board aims at setting appropriate targets and has included appropriate caps for the variable pay elements in the policy, which should contribute to social support for the policy. Furthermore, I'd like to point out that our proposed new remuneration policy will open the door to introduce more environmental, social, and governance metrics as incentives, up to 40% weight in STIP. These are metrics and targets that are valued by society and many of our employees. Back to you, Frans.
Yeah, thank you, Jeanette. The last paragraph of Jeanette's answer, of course, answers the question with regard to the VEB question with regard to societal support and how we have tested that societal support. Thank you for that, Jeanette. Now, I come to the next question, which is again on behalf of Mr. [Kautems]. What is the grant date of the performance shares? The remuneration policy is provided that provides that the number of conditional shares is calculated and outcomes at the start of the performance period, quote-unquote. Is that January the 1st, or is that after publication of the financial results? Furthermore, it says that the number of conditional shares is calculated based on, quote, fair value of performance shares at the start of the performance period, unquote.
How is this fair value calculated exactly? Why does Wolters Kluwer know better than the market what the value of the shares is? Jeanette, over to you.
Thank you, Frans. Several questions there. I mean, the first one, with respect to the valuation, yes, the valuation date is set at January the 1st. The fair value of the LTIP awards to the Executive Board is based on the EPS performance condition, is equal to the opening price adjusted by the present value of the future dividend payments during the performance period. The RTSR performance condition is what in IFRS 2 is called a market-based condition. The payoff is determined on the basis of the position of Wolters Kluwer's total shareholder return relative to those of competitors in the defined peer group. The fact that the payoff depends on market-based condition is relevant in the context of IFRS too.
For accounting purposes, this implies that the performance condition must be incorporated in the valuation model and that all factors must be taken into account that a knowledgeable and willing market party would take into account in valuing the performance shares. Given the above, IFRS too prescribes that the LTIP should be valued using derivative pricing models where the underlying assets are the shares of the companies in the defined peer group, including the share of Wolters Kluwer itself. Wolters Kluwer is using the statistical Monte Carlo simulation approach for determining the RTS fair value. This is a commonly used and accepted method. It's validated by external auditors and is in accordance with IFRS. Thank you, Frans.
Jeanette, that's a pretty detailed answer for not being a chartered accountant. Very impressive. Thank you for that. There are no further questions on this agenda item six. I would now like to put the agenda item six to the vote. The remuneration policy for the members of the Executive Board. Would the voting operator activate the system, please? It's open and it's closed. I see that 52% rounded. Slightly over 52% of the votes have been cast in favor of the proposal, which is a majority. As mentioned, however, adoption of this item requires a 75% majority vote, and that we did not achieve, unfortunately. I hereby confirm that the meeting has not adopted the remuneration policy for the members of the Executive Board.
That means that as a result, the current remuneration policy will remain in place for the year 2020. The Supervisory Board will evaluate. We will, of course, evaluate appropriate next steps before bringing the remuneration policy back for a vote to the general meeting. As a further consequence of the amended European Shareholders' Rights Directive, and in accordance with the articles of association, the Supervisory Board submits the remuneration policy of the Supervisory Board to the meeting for adoption. I would like to discuss items 7A and 7B together. These items also require a 70% majority vote. We will vote, of course, on it separately. Agenda item 7A reflects the Supervisory Board's general policy in accordance with statutory requirements. Agenda item 7B sets out the exact remuneration amounts and should be regarded as independents to the Supervisory Board general policy.
We treat them as separate items for transparency purposes. Our proposed policy is the aim of that is to attract and retain high-caliber individuals to the Supervisory Board. You have just reappointed one and appointed two members with the relevant skills and expertise to guide us in the development and implementation of the company's strategy and drive long-term value creation. We retain the external consultant who utilized market data for companies of comparable size, complexity, and international scope for benchmarking purposes. The primary comparator group of companies consists of companies listed at Euronext Amsterdam that have a two-tier board structure. In addition, a broader group of international companies listed in Europe, as well as industry competitors from the Executive Board pay group, were used in determining what we believe are appropriate fee levels.
Given the nature of the responsibility of the Supervisory Board and the independent character, the remuneration is not tied to the performance of the company and therefore includes fixed compensation only. In case of exceptional circumstances, however, including but not limited to a bid on the shares or part of the company, an ad hoc committee may have to be established for which the chairmen and members may receive a compensation which is based on a pro rata basis on the fee of the chairmen and members of the Audit Committee. However, the annual fee for the ad hoc committee will be capped at a maximum of five times the annual fee of the Audit Committee. In addition, the Supervisory Board members may be granted a compensation for international travel.
This we consider an important element of compensation, considering the international composition of the Supervisory Board compensating members for extra time spent and travel burden, particularly those who come from the United States and the time they spend on these visits compared to Dutch or European resident Supervisory Board members. Under agenda item 7B, it is proposed to increase the annual remuneration of the chairmen of the Supervisory Board by EUR 12,000, the remuneration of the vice chairmen of the Supervisory Board by EUR 8,500, that of other members by EUR 5,000. We also propose increasing the remuneration for the chairmanship and membership of the Audit Committee, Selection and Remuneration Committee. It is proposed to increase the compensation for international intercontinental travel per meeting by EUR 2,000. The full proposal, as you will have seen, is contained in the explanatory notes to this agenda item 7B.
In principle, the Supervisory Board assesses the remuneration of its members every two years, and there were no increases in 2019. For this proposal, we looked at the responsibilities of the Supervisory Board, remuneration levels of other Dutch-listed AEX companies and of some other European companies, and of the international composition of the Supervisory Board. That brings us to any questions or statements on this agenda item seven. Let me see. The first one is not a question, but a statement. Yeah, a statement. There's actually only one. That's a statement from the VEB. I will read it as follows. The VEB would like to make a few remarks on this agenda item. The proposed increase in remuneration for the Supervisory Board members is the fourth increase in only six years.
Proposals for increase of Supervisory Board remuneration should be accompanied by specific arguments that see to the responsibilities and the performance of the members. According to the VEB, these arguments are missing. In addition, the VEB regrets the proposed introduction of an annual fee for possible ad hoc committees, which can go up to 5x the annual fee of membership of the Audit Committee. In the VEB's opinion, a variable compensation, especially for such an amount, should not be part of the remuneration policy. Because of these reasons, the VEB will vote against the remuneration policy of the Supervisory Board. Okay. I think I would like to make a comment on this statement by the VEB myself. Let's say over the past several years, we have seen additional regulatory requirements being implemented across Europe and in the Netherlands.
I think everybody expects that these will continue, which means continued increased oversight and governance responsibilities for members of the Supervisory Board. As a result, we see an increased focus on ensuring that we are competitive with Supervisory Board remuneration to ensure we attract and retain Supervisory Board members. I can tell you, with attracting new Supervisory Board members from the United States, these elements do play a role. These changes, our changes which we propose, are recommended to ensure that we are aligned to and with being competitive with the median of other IX and European peer groups. That is the level. As it relates to compensation for ad hoc committees, which was specifically referred to in the VEB, this applies, and we have stated that very clearly, only to exceptional circumstances. We are not planning to do that in normal circumstances.
Exceptional circumstances are, for instance, a takeover bid on the company or parts thereof or similar things. This could lead to many meetings, and a huge workload for members of such a committee, as I have experienced in other companies. We are of the opinion that it's fair to those members in those circumstances to be compensated, and that is not variable pay. Okay. As far as that is concerned, the statement we are now going to vote. We are going to vote firstly on item 7A and then on 7B. We do that separately. Item 7B, proposal to adopt the remuneration policy for members of the Supervisory Board. I declare the voting open. Closed. The voting is now closed. Here we have the results. This proposal has been, the voting in favor is 99.1%. Thank you for that.
I hereby confirm that the meeting has adopted the remuneration policy for the members of the Supervisory Board. That means that we now go to the next item. Actually, I should add that this was an item which also required 75% voting, and we have achieved 99.1%. We are well over that figure. Now we come to item 7B, the proposal to amend the remuneration amounts of the members of the Supervisory Board to vote. Would we please activate the system, please? Thank you. You can close it now. Thank you. Okay. We are looking at the results, and that means that 99.4% rounded are in favor of this. As you know, this item also required a 70% majority vote, and we have achieved that.
I hereby confirm that the meeting has amended the remuneration for the members of the Supervisory Board in accordance with the proposal, and I thank the shareholders for that. Good. We now would like to discuss the agenda items 8, 9, and 10 together, but of course, not the voting of these items. These are, as you know, the annual authorizations given to the Executive Board that return to the agenda every year. Under agenda item 8A, it is proposed to extend the Executive Board's authority to issue shares and/or grant rights to subscribe for shares for the usual 18 months up to the usual maximum of 10% of the capital issued as of today.
Whereas agenda item 8B concerns a proposal to extend the Executive Board's authority to restrict or exclude the preemption rights of holders of ordinary shares up to a maximum of 10% as of the capital issued today. Under item 9, agenda item 9, it's proposed that the Executive Board be authorized for 18 months to acquire shares in the company up to a maximum of 10% of the capital issued of today. Looking at the notary, am I saying all the right words? Notary, yes. Agenda item 10 requests a resolution for the Executive Board if it so wishes to cancel the ordinary shares in the company's capital that the company has purchased or will purchase on the basis of agenda item 9 up to a maximum of 10% of the capital issued as of today.
For your information, in September 2019, the company completed a reduction in share capital by canceling 6.7 million ordinary shares that were held in treasury. As you know, the precise words of the resolution can be found in the agenda with its accompanying explanatory notes. There are no questions related to these agenda items 8, 9, and 10. Therefore, we are going to start with agenda item 8A, extending the authority of the Executive Board to issue shares, etc. Would the voting operator activate the system, please? I declare the voting open. It is closed now. I see that the voting in favor was 98.1%. That is rounded in favor of this proposal.
I hereby confirm that the extended authority of the Executive Board to issue shares and/or grant rights to subscribe for shares as requested in agenda item 8A has been adopted in accordance with the proposal. Thank you, shareholders, for that. I would now like to put agenda item 8B, extending the authority of the Executive Board to restrict or exclude the statutory preemption rights, to the vote. Would you activate the system, please? Yes. Voting is open. The voting is now closed. Here are the results. That means 97.7%—that's rounded—of the votes are in favor of item 8B. That means I hereby confirm that the extended authority of the Executive Board to restrict or exclude the statutory preemption right as requested in agenda item 8B has been adopted in accordance with the proposal.
We come to agenda item 9, extending the authority of the Executive Board to acquire shares in the company. I put that to the vote. Opening the vote now. Closing the vote. Here we have the results. The results are that 98.0% rounded of the votes have been in favor of this proposal, have been cast in favor. Good. I hereby confirm that the authority of the Executive Board to acquire shares in the company as requested in agenda item 9 has been adopted in accordance with our proposal. Now we come to the last voting item. That last voting item is agenda item 10, the cancellation of ordinary shares to the vote. Would the operator please activate the system again for the last time, I assume? The voting is open. Voting is closed. Thank you. Canceling shares, that is in favor.
99.9% of the shareholders would like us to do that. So that's 99% of the shareholders cast in favor. I hereby confirm that the cancellation of shares as requested in agenda item 10 has been adopted in accordance with the proposal. We come to any other business. Yeah, given that all shareholders have attended remotely today, I can proceed to any other business, but there are no further questions that have been put to this agenda item. That is as far as agenda item 11 is concerned. We come then actually to agenda item 12, which is closing of the meeting. I will now proceed to close the meeting. Let me say that your participation and input today are greatly appreciated. I wish you all good health and stay safe in these turbulent times.
I would like to say a special thank you for all the people who have made this possible from a technical perspective. This is new for all of us, and that is not very easy. As far as I'm concerned, it has gone perfect. Thank you for that. I hope that we will meet in better circumstances next year. Thank you very much, and I close the meeting.