Note 22: Remuneration of the Supervisory Board and the Board of Management

The members of the Supervisory Board and the Executive Committee are considered key management personnel. Total compensation to key management personnel amounted to €15.4 million (2012: €24.1 million), which includes €1.3 million related to the Dutch crisis tax (of which €0.9 million related to members of Board of Management). An amount of €7.0 million related to short-term employee benefits (2012: €10.4 million), €1.2 million to post-employment benefits and other post-employment compensation (2012: €1.5 million) and €5.8 million to share-based compensation (2012: €8.1 million).

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 Super- visory 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 allowance fees

 

Employer’s charges

 

Total remuneration

In €

 

2012

 

 

 

 

 

 

 

 

 

2013

1

As of May, 2012.

Karel Vuursteen, Chairman

 

121,100

 

100,000

 

5,000

 

15,000

 

3,900

 

123,900

Sari Baldauf1

 

52,400

 

50,000

 

17,500

 

10,000

 

 

77,500

Uwe-Ernst Bufe, Deputy Chairman

 

78,600

 

60,000

 

17,500

 

 

 

77,500

Dolf van den Brink

 

72,500

 

50,000

 

5,000

 

20,000

 

 

75,000

Peggy Bruzelius

 

94,500

 

50,000

 

15,000

 

15,000

 

17,300

 

97,300

Antony Burgmans

 

67,500

 

50,000

 

5,000

 

15,000

 

 

70,000

Peter Ellwood

 

84,900

 

50,000

 

17,500

 

15,000

 

3,900

 

86,400

Louis Hughes

 

93,600

 

50,000

 

30,000

 

15,000

 

3,900

 

98,900

Ben Verwaayen1

 

52,400

 

50,000

 

17,500

 

10,000

 

3,000

 

80,500

Total

 

717,500

 

510,000

 

130,000

 

115,000

 

32,000

 

787,000

Shares held by the members of the Supervisory Board

 

 

 

 

 

Number of shares at year-end

 

2012

 

2013

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

 

538

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 2013 are linked to return on investment (20 percent), operating income (20 percent), operating cash flows (30 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 (€228,900) related to employer’s contribution in the UK. The other costs for Mr. Nichols (€73,600) and Mr. Darner (€50,700) related to living expenses and home leave allowances.

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 2013 remuneration. These amounts together with the contributions over the 2013 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 amounted to €41.28 per performance-related share conditionally granted in 2013 for those members of the Board of Management facing a two year holding restriction (2012: €32.43) and €50.89 for those members whose holding restriction will lapse after the end of their Board member’s term (2012: €38.79). The fair value for the shares related to the share-matching plan amounted to €40.67 (2012: €39.72).

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

Ton Büchner

 

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

Total

 

2,340,700

 

795,600

 

1,462,200

 

575,300

 

206,900

 

3,479,800

 

796,300

 

9,656,800

Board remuneration 2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In €

 

Salary

 

Short-term incentives

 

Other short-term benefits

 

Post-employment benefits

 

Other post-employment compen­sation

 

Share-based compen­sation

 

Total remuneration

1

Until April 26, 2013.

Ton Büchner

 

820,000

 

630,900

 

8,100

 

 

291,600

 

807,700

 

2,558,300

Keith Nichols

 

616,000

 

308,100

 

302,500

 

 

221,800

 

857,900

 

2,306,300

Leif Darner1

 

200,700

 

 

53,200

 

58,900

 

 

996,900

 

1,309,700

Tex Gunning1

 

200,700

 

 

2,700

 

58,900

 

 

1,367,600

 

1,629,900

Total

 

1,837,400

 

939,000

 

366,500

 

117,800

 

513,400

 

4,030,100

 

7,804,200

Former members of the Board of Management

In 2013, charges for former members of the Board of Management amounted to €4.8 million (2012: €18,000) mainly due to taxation on excessive pay (‘Belastingheffing excessieve beloningsbestanddelen’) and Dutch crisis tax.

Performance-related shares

With regard to the performance related shares granted to the members of the Board of Management in 2011, the final vesting percentage of the series 2011-2013 equaled 70.83 percent (series 2010-2012: 66.67 percent), including dividend shares 77.98 percent (series 2010-2012: 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, 2013

 

Granted in 2013

 

Vested in 2013

 

Forfeited in 2013

 

Dividend in 2013

 

Balance at December 31, 2013

 

Vested on January 1, 2014

Ton Büchner

 

2012 – 2014

 

33,099

 

 

 

 

967

 

34,066

 

 

 

2013 – 2015

 

 

24,200

 

 

 

707

 

24,907

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Keith Nichols

 

2010 – 2012

 

13,471

 

 

(13,471)

 

 

 

 

 

 

2011 – 2013

 

19,895

 

 

 

(5,973)

 

582

 

14,504

 

14,504

 

 

2012 – 2014

 

24,799

 

 

 

 

724

 

25,523

 

 

 

2013 – 2015

 

 

18,200

 

 

 

531

 

18,731

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Leif Darner

 

2010 – 2012

 

13,471

 

 

(13,471)

 

 

 

 

 

 

2011 – 2013

 

19,895

 

 

 

(5,973)

 

582

 

14,504

 

14,504

 

 

2012 – 2014

 

24,799

 

 

 

 

724

 

25,523

 

 

 

2013 – 2015

 

 

6,067

 

 

 

177

 

6,244

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tex Gunning

 

2010 – 2012

 

13,471

 

 

(13,471)

 

 

 

 

 

 

2011 – 2013

 

19,895

 

 

 

(5,973)

 

582

 

14,504

 

14,504

 

 

2012 – 2014

 

24,799

 

 

 

 

724

 

25,523

 

 

 

2013 – 2015

 

 

6,067

 

 

 

177

 

6,244

 

Shares held by the Board of Management

 

 

 

 

 

Number of shares at year-end

 

2012

 

2013

Ton Büchner

 

10,810

 

16,243

Keith Nichols

 

16,632

 

21,870

Share-matching plan

The members of the Board of Management are required to buy AkzoNobel shares. Under certain conditions, such shares may be matched by the company. See the Remuneration report for further details on individual arrangements.

Number of potential matching shares

 

 

 

 

 

 

 

 

 

 

 

 

 

Year of share investment

 

Potential match

 

Matched in 2013

 

Forfeited in 2013

 

Balance at year-end 2013

Ton Büchner

 

2012

 

10,810

 

 

 

10,810

 

 

2013

 

1,429

 

 

 

1,429

Tex Gunning

 

2012

 

1,002

 

(1,002)

 

 

 

 

2013

 

702

 

(702)

 

 

Stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year of issue

 

Exercise price in €

 

Outstanding at January 1, 2013

 

Forfeited in 2013

 

Exercised in 2013

 

Outstanding at year-end 2013

 

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