Change

As stated in the remuneration policy, vesting of 50 percent of the shares conditionally granted under the performance share plan is linked to AkzoNobel’s relative sustainability performance by taking AkzoNobel’s average score in the relevant Dow Jones Sustainability Index (DJSI) for conditional grants made up to 2011, and the SAM ranking for conditional grants made as of 2011, during the three-year performance period. SAM is an organization that annually assesses around 2,000 of the world’s largest companies covering the major indices and determines their respective sustainability scores.

For all conditional grants, the vesting schedule has been determined by the Supervisory Board as follows:

Average position in DJSI/SAM1 during performance period

 

 

 

 

 

Vesting (as % of half of conditional grant)

1

For the 2011 grant and onwards, the sustainability performance is measured as AkzoNobel’s average score in the Sustainable Asset Management (SAM) ranking. For the 2010 grant the average ranking of the company in the relevant Dow Jones Sustainability Index (DJSI) remains the sustainability performance measure.

1

 

150%

2

 

125%

3

 

100%

4 – 6

 

75%

7 – 10

 

50%

11 – 15

 

25%

Below 15

 

0%

AkzoNobel ranked first in 2012 and second in 2010 and 2011 in the relevant SAM and DJSI indices. As a result, AkzoNobel’s sustainability performance over the period 2010 through 2012 resulted in a vesting of 133 percent for this part of the long-term incentive.

The remaining 50 percent is linked to AkzoNobel’s relative Total Shareholder Return (TSR) performance compared with the companies in a defined peer group.

Independent external specialists conduct an analysis to calculate the number of shares that will vest according to the TSR ranking. In order to adjust for changes in exchange rates, all local currencies are converted into euros. The relative TSR performance is compared with a peer group as determined by the Supervisory Board.

The peer group currently consists of the following companies:

  • Arkema
  • Solvay
  • DuPont
  • Kemira OYJ
  • Kansai Paint
  • Valspar Corporation
  • RPM Industrial
  • Nippon Paint
  • Sherwin-Williams
  • PPG Industries

This peer group is reviewed on a regular basis to ensure that the companies in the group remain appropriate peers. Occasionally, changes need to be made, particularly if one of the companies in the peer group is taken over. The Supervisory Board will see to it that, to the extent reasonably possible, a replacement has no impact on the company’s relative TSR ranking.

The following vesting scheme has been applied as of 2009 for the conditional grants:

Vesting scheme for the conditional grants

 

 

 

Rank

 

Vesting (as % of half of conditional grant)

1

 

150%

2

 

135%

3

 

120%

4

 

100%

5

 

75%

6

 

50%

7

 

25%

8 – 11

 

0%

AkzoNobel’s TSR performance over the period 2010 through 2012 resulted in an 11th position within the ranking of the peer group companies. This ranking did not result in any vesting of shares for the TSR part of the share plan.

Based on AkzoNobel’s combined sustainability and TSR performance, the final vesting percentage of the 2010 conditional grant after including the dividend yield at December 31, 2012, which was determined to be 10.42 percent, equaled 73.61 percent. This resulted in the following definitive awards of shares under the 2010 plan: 17,962 for the former CEO and 13,471 shares for the other members of the Board of Management. Upon its ex-post review of the relationship between the chosen performance criteria and the strategic objectives applied, and of the relationship between remuneration and performance, the Supervisory Board, given the importance of the link between the variable remuneration and the company’s strategic ambitions, decided not to make any correction in respect of the definitive grant.

The number of performance-related shares conditionally granted under the 2012 plan amounted to 31,900 for the CEO and 23,900 for the other members of the Board of Management. The former CEO and former member of the Board of Management that left the company during 2012 received pro-rata awards under the plan.

In accordance with provision II.2.13d of the Code, the schedule at the end of this remuneration report sets out for 2007 onwards (i) the number of at target shares conditionally granted; (ii) the number of shares which have vested; (iii) the number of shares held by members of the Board of Management at the end of the lock up period; (iv) the face value at the conditional share grant, at vesting and at the end of the lock up period respectively.

In accordance with the company’s Articles of Association, the Code and the rules of the performance share plan, the number of shares to be conditionally granted to members of the Board of Management is determined by the Supervisory Board, within the limits of the remuneration policy and the maximum number of shares as adopted and approved, respectively, by the AGM. The Supervisory Board has decided that where, in the event of a takeover, the payout under the performance share plan is between 100 percent and 150 percent, the Supervisory Board will, taking into account the performance of the company prior to the takeover bid, at its discretion decide whether the projected outcome is fair and may decide to adjust the vesting upwards or downwards within the bandwidth mentioned. This does not affect the discretion the Supervisory Board has to correct the variable remuneration of the Board of Management upwards or downwards in exceptional circumstances. It is noted that a takeover would not influence the SAM or DJSI sustainability ranking of the company and therefore the Supervisory Board will in such event primarily take into account the company’s TSR performance.

Valuation1 shares Board of Management

 

Unconditional shares, vested

1

Values based on the share price on January 1 of the relevant financial year (face value).

 

 

 

 

 

 

 

 

 

 

 

 

 

Series 2007 - 2009

 

Conditional share grant

 

Number of vested shares

 

End of lock up period (2012)

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of shares

 

Number

 

Value at grant in €

 

Number

 

Value at vesting in €

 

Number

 

Value in €

Keith Nichols

 

4,250

 

196,265

 

6,408

 

297,331

 

3,626

 

135,467

Leif Darner

 

15,100

 

697,318

 

22,768

 

1,056,435

 

14,689

 

548,781

 

 

 

 

 

 

 

 

 

 

 

 

 

Series 2008 - 2010

 

Conditional share grant

 

Number of vested shares

 

End of lock up period (2013)

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of shares

 

Number

 

Value at grant in €

 

Number

 

Value at vesting in €

 

Number

 

Value in €

Keith Nichols

 

8,733

 

478,481

 

 

 

 

Leif Darner

 

11,600

 

635,564

 

 

 

 

Tex Gunning

 

3,867

 

211,873

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Series 2009 - 2011

 

Conditional share grant

 

Number of vested shares

 

End of lock up period (2014)

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of shares

 

Number

 

Value at grant in €

 

Number

 

Value at vesting in €

 

Number

 

Value in €

Keith Nichols

 

27,400

 

806,656

 

19,125

 

714,510

 

9,563

 

NA

Leif Darner

 

27,400

 

806,656

 

19,125

 

714,510

 

12,432

 

NA

Tex Gunning

 

27,400

 

806,656

 

19,125

 

714,510

 

12,432

 

NA

 

 

 

 

 

 

 

 

 

 

 

 

 

Series 2010 - 2012

 

Conditional share grant

 

Number of vested shares

 

End of lock up period (2015)

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of shares

 

Number

 

Value at grant in €

 

Number

 

Value at vesting in €

 

Number

 

Value in €

Keith Nichols

 

18,300

 

849,120

 

13,471

 

670,182

 

 

NA

Leif Darner

 

18,300

 

849,120

 

13,471

 

670,182

 

 

NA

Tex Gunning

 

18,300

 

849,120

 

13,471

 

670,182

 

 

NA

Conditional shares, not vested

 

 

 

 

 

 

 

 

 

Series 2011 - 2013

 

 

 

Conditional share grant at  target

 

Vesting at min.
performance

 

Vesting at max.
performance

 

 

 

 

 

 

 

 

 

Number of shares

 

Number

 

Value at grant in €

 

Number

 

Number

Keith Nichols

 

18,600

 

864,714

 

 

27,900

Leif Darner

 

18,600

 

864,714

 

 

27,900

Tex Gunning

 

18,600

 

864,714

 

 

27,900

 

 

 

 

 

 

 

 

 

Series 2012 - 2014

 

 

 

Conditional share grant at  target

 

Vesting at min.
performance

 

Vesting at max.
performance

 

 

 

 

 

 

 

 

 

Number of shares

 

Number

 

Value at grant in €

 

Number

 

Number

Ton Büchner

 

31,900

 

1,191,784

 

 

47,850

Keith Nichols

 

23,900

 

892,904

 

 

35,850

Leif Darner

 

23,900

 

892,904

 

 

35,850

Tex Gunning

 

23,900

 

892,904

 

 

35,850

Keyword Search
Copyright © 2013 Akzo Nobel N.V.