Note F: Shareholders’ equity

The holders of common shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at the Annual General Meeting of shareholders. The holders of the priority shares are entitled to a dividend of 6% per share or the statutory interest in the Netherlands, whichever is lower, plus any accrued and unpaid dividends. They are entitled to 800 votes per share (in accordance with the 800 times higher nominal value per share) at the Annual General Meeting of shareholders. In addition, the holders of priority shares have the right to draw up binding lists of nominees for appointment to the Supervisory Board and the Board of Management; amendments to the Articles of Association are subject to the approval of the Meeting of Holders of Priority Shares.

Priority shares may only be transferred to a transferee designated by a Meeting of Holders of Priority Shares and against payment of the par value of the shares, plus interest at the rate of 6% per annum or the statutory interest in the Netherlands, whichever is lower, for the period between the beginning of the year and the date of transfer. There are no restrictions on voting rights of holders of common or priority shares. The Articles of Association set out procedures for exercising voting rights. The Annual General Meeting of shareholders has resolved in 2022 to authorize the Board of Management for a period of 18 months (i) to issue shares (or grant rights to shares) in the capital of the company up to a maximum of 10%, of the total number of shares outstanding (and to restrict or exclude the pre-emptive rights to those shares) and (ii) to acquire shares in the capital of the company, provided that the shares that will at any time be held will not exceed 10% of the issued share capital. The issue or repurchase of shares requires the approval of the Supervisory Board.

On February 16, 2021, a €1 billion share buyback program was announced, which was completed in January 2022. All shares bought back under this program were cancelled.

In February 2022, a €500 million share buyback program was announced, which was completed in 2022. As at December 31, 2022, a total of 7.3 million shares had been acquired under this program, of which 3.3 million were cancelled.

Of the shareholders’ equity of €4.3 billion (2021: €5.4 billion), €4.0 billion (2021: €5.1 billion) was unrestricted and available for distribution, subject to the relevant provisions of our Articles of Association and Dutch law.

During 2022, 8,651,230 common shares were repurchased (2021: 11,296,283 shares repurchased). The total amount of shares cancelled was 7,448,544; cancelled shares related to share buyback in the current and the previous year (2021: 9,247,849 shares cancelled). For further details on weighted average number of shares, refer to Note 10 of the Consolidated financial statements.

Legal reserves include the €190 million reserve relating to earnings retained by subsidiaries, associates and joint ventures after the year 1983, to the extent that there are limitations to arrange profit distributions, and a €106 million reserve for capitalized development costs.

Dividend

Our dividend policy is to pay a stable to rising dividend.

In 2022, an interim dividend of €0.44 (2021: €0.44) per common share was paid. We propose a 2022 final dividend of €1.54 (2021: €1.54) per common share, which would equal a total 2022 dividend of €1.98 (2021: €1.98).