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Note 21: Remuneration of the Supervisory Board and the Board of Management


Total compensation to key management personnel amounted to €24.1 million (2011: €15.4 million), which is inclusive of €1.7 million related to Dutch crisis tax (of which €1.4 million related to members of Board of Management. Payments to the members of the Supervisory Board did not exceed the threshold for crisis tax). €10.4 million related to short-term employee benefits (2011: €7.6 million); €1.5 million to post-employment benefits and other post-employment compensation (2011: €2.1 million), €8.1 million to share based compensation (2011: €5.7 million) and €2.5 million relates to payments upon termination of employment. The members of the Executive Committee which are not a member of the Board of Management are included in key management personnel.

Supervisory Board

Members of the Supervisory Board receive a fixed remuneration: €100,000 for the Chairman, €60,000 for the Deputy Chairman and €50,000 for the other members. Members of committees receive an extra compensation. Members living outside the Netherlands receive an attendance fee dependent on the country of residence. Members who are resident in the Netherlands do not receive an attendance fee except for meetings held outside the Netherlands.

In accordance with the Articles of Association and good corporate governance practice, the remuneration of Supervisory Board members is not dependent on the results of the company.

We do not grant share-based compensation to our Supervisory Board members, neither do we provide loans. Travel expenses and facilities for members of the Supervisory Board are borne by the company and reviewed by the Audit Committee. The shares in the company owned by Supervisory Board members serve as a long-term investment in the company.

Supervisory Board

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total remuneration

 

Remuneration

 

Attendance fee

 

Committee fee

 

Employer’s charges

 

Total remuneration

In €

 

2011

 

 

 

 

 

 

 

 

 

2012

1

As of May 1, 2012.

2

Until May 1, 2012.

Karel Vuursteen, Chairman

 

122,600

 

100,000

 

2,500

 

15,000

 

3,600

 

121,100

Sari Baldauf1

 

 

33,300

 

10,000

 

6,700

 

2,400

 

52,400

Uwe-Ernst Bufe, Deputy Chairman

 

80,100

 

60,000

 

15,000

 

 

3,600

 

78,600

Virginia Bottomley2

 

82,600

 

16,700

 

5,000

 

3,300

 

1,200

 

26,200

Dolf van den Brink

 

75,000

 

50,000

 

2,500

 

20,000

 

 

72,500

Peggy Bruzelius

 

175,600

 

50,000

 

12,500

 

15,000

 

17,000

 

94,500

Antony Burgmans

 

70,000

 

50,000

 

2,500

 

15,000

 

 

67,500

Peter Ellwood

 

77,600

 

50,000

 

17,500

 

13,800

 

3,600

 

84,900

Louis Hughes

 

92,600

 

50,000

 

25,000

 

15,000

 

3,600

 

93,600

Ben Verwaayen1

 

 

33,300

 

10,000

 

6,700

 

2,400

 

52,400

Total

 

776,100

 

493,300

 

102,500

 

110,500

 

37,400

 

743,700

Shares held by the members of the Supervisory Board

 

 

 

 

 

Number of shares at year-end

 

2011

 

2012

Karel Vuursteen

 

400

 

400

Sari Baldauf

 

 

Uwe-Ernst Bufe

 

500

 

500

Dolf van den Brink

 

500

 

500

Peggy Bruzelius

 

500

 

500

Antony Burgmans

 

500

 

500

Peter Ellwood

 

500

 

500

Louis Hughes

 

500

 

500

Ben Verwaayen

 

 

Board of Management

The individual contracts of the members of the Board of Management are determined by the Supervisory Board within the framework of the remuneration policy adopted by the Annual General Meeting of shareholders. We do not provide loans to members of the Board of Management. For more detailed information on the decisions of the Supervisory Board with respect to the individual contracts of the members of the Board of Management, see the Remuneration report.

Short-term incentive

The short-term incentives for 2012 are linked to EVA (35 percent), EBITDA (35 percent) and the individual and qualitative targets of the members of the Board of Management (30 percent). For more information, see the Remuneration report.

Other short-term benefits

Other short-term benefits include employer’s charges and other compensations. Employer’s charges refer to social contributions and healthcare contributions. The social charges of Mr. Nichols (€110,300) related to employer’s contribution in the UK. Costs for Mr. Darner (amounting to €689,500) related to compensation for living expenses, home leave allowances and relocation. Costs for Mr. Nichols (€72,100) related to living expenses and home leave allowances. A special award (€578,600) to Mr. Gunning concerned a conditional cash payment relating to the period 2009-2011 and subject to pre-defined objectives focusing on the integration of the ICI activities into the AkzoNobel group companies.

Post-employment benefits and other post-employment compensation

Other post-employment compensation are payments to a person intended for building up retirement benefits other than those included in Post-employment benefits. Pension contributions were calculated over the 2012 remuneration. These amounts together with the contributions over the 2012 short-term incentives are included in the post-employment benefits and other post-employment compensation.

Share-based compensation

The costs for share-based compensation are non-cash and related to the performance-related share plan and the share matching plan following IFRS 2. The fair value of the performance-related share plan at grant date is amortized as a charge against income over the three-year vesting period. The fair value was €31.15 per performance-related share conditionally granted in 2012 for those members of the Board of Management facing a two-year holding restriction (2011: €46.91) and €38.79 for those members whose holding restriction will lapse after the end of their Board member’s term. The fair value for the shares related to the share matching plan amounted to €39.72 and the fair value for the matching arrangement for Mr. Büchner amounted to €37.92.

Termination benefits

Termination benefits include costs that have been incurred in 2012 relating to leaving arrangements.

Board remuneration 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

In €

 

Salary

 

Short-term incentives

 

Other short-term benefits

 

Post-employment benefits

 

Share-based compensation

 

Total remuneration

Keith Nichols

 

591,500

 

206,400

 

238,900

 

198,200

 

848,500

 

2,083,500

Leif Darner

 

591,500

 

206,400

 

154,200

 

217,900

 

848,500

 

2,018,500

Tex Gunning

 

591,500

 

206,400

 

4,900

 

240,800

 

848,500

 

1,892,100

Hans Wijers

 

788,700

 

423,500

 

4,900

 

482,900

 

1,132,100

 

2,832,100

Rob Frohn

 

591,500

 

206,400

 

7,400

 

185,800

 

848,500

 

1,839,600

Total

 

3,154,700

 

1,249,100

 

410,300

 

1,325,600

 

4,526,100

 

10,665,800

Board remuneration 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In €

 

Salary

 

Short-term incentives

 

Other short-term benefits

 

Post-employment benefits

 

Other post-employment compensation

 

Share-based compensation

 

Termination benefits

 

Total remuneration

1

As of April 23, 2012.

2

Until April 23, 2012.

3

Until May 1, 2012.

Ton Büchner1

 

534,700

 

170,900

 

5,700

 

 

128,900

 

399,500

 

 

1,239,700

Keith Nichols

 

602,000

 

224,500

 

182,400

 

109,100

 

78,000

 

880,400

 

 

2,076,400

Leif Darner

 

602,000

 

200,100

 

689,500

 

229,500

 

 

1,248,600

 

796,300

 

3,766,000

Tex Gunning

 

602,000

 

200,100

 

584,600

 

236,700

 

 

951,300

 

 

2,574,700

Hans Wijers2

 

267,700

 

267,700

 

2,000

 

213,100

 

 

1,661,900

 

1,130,600

 

3,543,000

Rob Frohn3

 

200,700

 

130,400

 

2,800

 

73,100

 

 

1,245,500

 

602,000

 

2,254,500

Total

 

2,809,100

 

1,193,700

 

1,467,000

 

861,500

 

206,900

 

6,387,200

 

2,528,900

 

15,454,300

Former members of the Board of Management

In 2012, charges for former members of the Board of Management amounted to €18,000 (2011: €21,000).

Performance-related shares

With regard to the performance related shares granted to the members of the Board of Management in 2010, the final vesting percentage of the series 2010-2012 equaled 66.67 percent (series 2009-2011: 62.5 percent), including dividend shares 73.61 percent. The members of the Board of Management will retain the shares for a minimum period of two years after vesting or (if shorter) for the duration of their tenure as member of the Board of Management.

Number of performance-related shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Series

 

Balance at January 1, 2012

 

Granted in 2012

 

Vested in 2012

 

Forfeited in 2012

 

Dividend in 2012

 

Balance at December 31, 2012

 

Vested on January 1, 2012

Ton Büchner

 

2012 – 2014

 

 

31,900

 

 

 

1,199

 

33,099

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Keith Nichols

 

2009 – 2011

 

19,125

 

 

(19,125)

 

 

 

 

 

 

2010 – 2012

 

19,473

 

 

 

(6,736)

 

734

 

13,471

 

13,471

 

 

2011 – 2013

 

19,173

 

 

 

 

722

 

19,895

 

 

 

2012 – 2014

 

 

23,900

 

 

 

 

 

899

 

24,799

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Leif Darner

 

2009 – 2011

 

19,125

 

 

(19,125)

 

 

 

 

 

 

2010 – 2012

 

19,473

 

 

 

(6,736)

 

734

 

13,471

 

13,471

 

 

2011 – 2013

 

19,173

 

 

 

 

722

 

19,895

 

 

 

2012 – 2014

 

 

23,900

 

 

 

899

 

24,799

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tex Gunning

 

2009 – 2011

 

19,125

 

 

(19,125)

 

 

 

 

 

 

2010 – 2012

 

19,473

 

 

 

(6,736)

 

734

 

13,471

 

13,471

 

 

2011 – 2013

 

19,173

 

 

 

 

722

 

19,895

 

 

 

2012 – 2014

 

 

23,900

 

 

 

899

 

24,799

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hans Wijers

 

2009 – 2011

 

25,547

 

 

(25,547)

 

 

 

 

 

 

2010 – 2012

 

25,964

 

 

 

(8,981)

 

978

 

17,961

 

17,962

 

 

2011 – 2013

 

25,564

 

 

 

 

962

 

26,526

 

 

 

2012 – 2014

 

 

10,700

 

 

 

 

 

402

 

11,102

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rob Frohn

 

2009 – 2011

 

19,125

 

 

(19,125)

 

 

 

 

 

 

2010 – 2012

 

19,473

 

 

 

(6,736)

 

734

 

13,471

 

13,471

 

 

2011 – 2013

 

19,173

 

 

 

 

722

 

19,895

 

 

 

2012 – 2014

 

 

8,000

 

 

 

301

 

8,301

 

Share matching plan

The CEO and other members of the Board of Management are required to build up, over a five-year period from the date of appointment, and then hold, at least three times respectively one time their gross base salary in AkzoNobel shares for the duration of their tenure as member of the Board of Management. Under certain conditions, members who invest part of their short term incentives in AkzoNobel shares may have such shares matched by the company. See the Remuneration report.

Shares held by the Board of Management

 

 

 

 

 

Number of shares at year-end

 

2011

 

2012

Ton Büchner

 

 

10,810

Keith Nichols

 

7,069

 

16,632

Leif Darner

 

46,162

 

48,594

Tex Gunning

 

 

14,435

Stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year of issue

 

Exercise price in €

 

Outstanding at January 1, 2012

 

Forfeited in 2012

 

Exercised in 2012

 

Outstanding at December 31, 2012

 

Expiry date

Keith Nichols

 

2006

 

46.46

 

3,000

 

 

 

3,000

 

April 26, 2013

 

 

2007

 

58.89

 

3,750

 

 

 

3,750

 

April 26, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Leif Darner

 

2006

 

46.46

 

13,000

 

 

 

13,000

 

April 26, 2013

 

 

2007

 

58.89

 

13,000

 

 

 

13,000

 

April 26, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hans Wijers

 

2002

 

46.53

 

14,850

 

(14,850)

 

 

 

April 25, 2012

 

 

2005

 

31.98

 

23,000

 

 

(23,000)

 

 

April 24, 2012

 

 

2006

 

46.46

 

19,800

 

 

 

19,800

 

April 26, 2013

 

 

2007

 

58.89

 

19,800

 

 

 

19,800

 

April 26, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rob Frohn

 

2006

 

46.46

 

13,000

 

 

 

13,000

 

April 26, 2013

 

 

2007

 

58.89

 

13,000

 

 

 

13,000

 

April 26, 2014

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