|
Executive Board remuneration policy
The objectives of the remuneration policy are to attract, motivate and retain good management, and to achieve a market-compliant remuneration policy based on a variable remuneration linked to certain measurable objectives, directly related to the performance targets of the Company. The remuneration policy as approved by the General Meeting of Shareholders is to remunerate the Executive Board at the median of the market reference group. The different components of the Executive Board’s remuneration are reviewed by the Remuneration Committee on at least a yearly basis.
Remuneration of the Executive Board consists of the following components:
- a base salary which is fixed and reviewed once a year;
- a variable payment which is related to performance against targets agreed with the Supervisory Board for the year ahead;
- advantages in kind such as health insurance, a company car and an amount for compensation of expenses;
- pension contributions;
- a long-term incentive consisting of performance shares.
A labour market reference group was constituted for the Executive Board’s base salary. At the AGM of 2008, a proposal was approved to define the base salary peer group as a group consisting of the lowest seven companies of the AEX index and the top eight companies of the AMX index as such indices are published by NYSE Euronext Amsterdam. Financial institutions and real estate companies are excluded from the base salary peer group.
The annual review of the labour market reference group, which was conducted by an external consultant in December 2009, showed deviations with regard to the newly appointed members of the Executive Board against the Company’s policy to remunerate at the median level of the market reference group. A proposal was therefore made to increase the base salary of the Company’s three Executive Vice-Presidents, also members of the Executive Board, from EUR 330,000 p.a. to EUR 395,000 p.a. The base salary of the CEO and of the CFO was also reviewed.
Below is a table showing the structure of:
- the variable amount which can be earned when performance against the preset targets reaches (i) the minimum score of 80% below which no variable amount is paid, (ii) the amount when the score reaches the targets and (iii) the maximum variable amount when actual performance exceeds the preset targets with 150%. In case actual performance exceeds 150% of the preset targets, the maximum variable amount remains capped at 150%;
- the economic value of the Long-Term Incentive (LTI) grant of performance shares when (i) the Company’s actual TSR performance is at median level of the peer group below which level no performance shares will vest and when (ii) the Company’s actual TSR performance measured against the peer group achieves the number one position in the peer group.
For further information concerning the actual number of shares held (either freely available or for which a lockup restriction applies) by members of the Executive Board, or the number of shares conditionally granted to members of the Executive Board, reference is made to page 138 of the financial statements in this annual report.
|
|
