Change

The Supervisory Board ensures that the remuneration policy is aligned with the objectives of the company also in its implementation. Both the policy itself, and the checks and balances that are applied in its execution, are designed to avoid incidents where members of the Board of Management – and senior executives for whom similar incentive plans apply – act in their own interest, take risks that are not in line with our strategy and risk appetite, or where remuneration levels cannot be justified in any given circumstance.

To ensure that remuneration is linked to performance, a significant proportion of the remuneration package is variable and dependent on the short and long-term performance of the individual Board member and the company. Performance targets must be realistic and sufficiently stretching and – particularly in respect of the variable remuneration components – the Supervisory Board ensures that the relationship between the chosen performance criteria and the strategic objectives applied, as well as the relationship between remuneration and performance, are properly reviewed and accounted for, both ex-ante and ex-post.

In accordance with the requirements of the Code, the Remuneration Committee, before setting the targets to be proposed for adoption by the Supervisory Board, has carried out scenario analyses of the possible financial outcomes of meeting target levels, as well as maximum performance levels, and how they may affect the level and structure of the remuneration of the members of the Board of Management.

As stated in the remuneration policy, we aim to maintain overall remuneration levels that are at the median level of the external market. For benchmarking purposes, a peer group has been defined by the Supervisory Board. Following a review in 2012, two companies (Wolters Kluwer, Reed Elsevier) were removed from the peer group and four companies (Arkema, Henkel, Lafarge and Reckitt Benckiser) were added. The review focused on the size of the group, as well as on the geographical and industry fit. The peer group now consists of the following companies:

  • Clariant
  • Royal DSM
  • Heineken
  • Royal KPN
  • Royal Philips
  • Solvay
  • Arkema
  • Henkel
  • Royal Ahold
  • Reckitt Benckiser
  • Lafarge
  • Randstad

The Remuneration Committee consults professional independent remuneration experts to ensure an appropriate comparison. It further reviews the impact on pay differentials within the company, which is taken into account by the Supervisory Board when the overall remuneration is determined. When other benefits are granted, the Supervisory Board ensures that these are in line with market norms.

For communication purposes, the table “Compensation overview members of the Board of Management 2012” presents a summarizing overview of the remuneration of the current members of the Board of Management. Reference is made to Note 21 of the Financial statements for more details.

Compensation overview members of the Board of Management 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ton Büchner1 Chief Executive Officer

 

Keith Nichols Chief Financial Officer

 

Leif Darner Board member Performance Coatings

 

Tex Gunning Board member Decorative Paints

 

Hans Wijers2 Chief Executive Officer

 

Rob Frohn3 Board member Specialty Chemicals

in €

 

2012

 

2012

 

2012

 

2012

 

2012

 

2012

1

As per April 23, 2012.

2

Until April 23, 2012.

3

Until May 1, 2012.

4

Costs relating to share awards (Performance Share Plan and Share Matching Plan) are non-cash and relate to the expenses following IFRS2.

5

Other post-employment benefits refer to payments intended for building up retirement benefits other than those included in Post-employment benefits.

6

Other emoluments refers to social security cost. For Mr. Nichols, this refers to the employer’s contribution in the UK.

7

Other compensation refers to compensation for living expenses and home leave allowances.
For Mr. Darner this refers to the regular expatriate support benefits for 2012, as well as the gross cost for repatriation support in 2013 following his retirement.

8

Termination benefits for Mr. Darner refers to costs incurred in 2012 which will be paid in 2013.

Base salary

 

534,700

 

602,000

 

602,000

 

602,000

 

267,700

 

200,700

Short-term incentive

 

170,900

 

224,500

 

200,100

 

200,100

 

267,700

 

130,400

Share awards4

 

399,500

 

880,400

 

1,248,600

 

951,300

 

1,661,900

 

1,245,500

Post-employment benefits

 

 

109,100

 

229,500

 

236,700

 

213,100

 

73,100

Other post-employment benefits

 

128,900

 

78,000

 

 

 

 

Other emoluments6

 

5,700

 

110,300

 

6,000

 

6,000

 

2,000

 

2,800

Other compensation7

 

 

72,100

 

683,500

 

578,600

 

 

Termination benefits8

 

 

 

796,300

 

 

1,130,600

 

602,000

Total remuneration

 

1,239,700

 

2,076,400

 

3,766,000

 

2,574,700

 

3,543,000

 

2,254,500

Base salary

The base salaries of members of the Board of Management increased by 1.8 percent in 2012.

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