Note 4: Employee benefits

Salaries, wages and other employee benefits in operating income

 

 

 

 

 

In € millions

 

2012

 

2013

Salaries and wages

 

(2,354)

 

(2,268)

Pension and other post-retirement cost

 

(248)

 

(268)

Other social charges

 

(416)

 

(414)

Total

 

(3,018)

 

(2,950)

Average number of employees

 

 

 

 

 

During the year

 

2012

 

2013

Decorative Paints

 

17,200

 

16,800

Performance Coatings

 

21,700

 

21,300

Specialty Chemicals

 

11,800

 

10,600

Corporate and other

 

1,500

 

1,500

Total

 

52,200

 

50,200

The average number of employees working outside the Netherlands was 45,000 (2012: 47,100).

Number of employees

 

 

 

 

 

At year-end

 

2012

 

2013

Decorative Paints

 

17,000

 

16,200

Performance Coatings

 

21,300

 

21,400

Specialty Chemicals

 

10,800

 

10,400

Corporate and other

 

1,500

 

1,600

Total

 

50,600

 

49,600

At year-end 2013, we employed 49,560 staff for ongoing activities (year-end 2012: 50,610 employees). The net decrease was due to:

  • Divestments, affecting 440 employees
  • A decrease of 1,740 employees due to ongoing restructuring
  • An increase of 1,130 employees, due to new hires in high growth markets.

Share-based compensation

Share-based compensation relates to the performance-related share plan as well as the share matching plan. Charges recognized in the 2013 statement of income for share-based compensation amounted to €43 million and are included in salaries and wages (2012: €43 million).

Performance-related share plan

Under the performance-related share plan, a number of conditional shares are granted to the members of the Board of Management, members of the Executive Committee and executives each year. The number of participants of the performance-related share plan at year-end 2013 was 689 (2012: 656).

The conditional grant of shares up to the series 2012–2014 is linked for 50 percent to the ranking of the company in the RobecoSAM benchmark (SAM) and the remaining 50 percent to the relative TSR performance of the company compared with a peer group. As from the series 2013-2015, return on investment (ROI) was added as an additional performance measure. Subsequently, the weighting changed to 35 percent for both TSR and ROI and 30 percent for SAM.

The shares of the series 2010-2012 have vested and were delivered to the participants in 2013.

The conditional shares of the series 2011-2013 vested as follows:

  • our TSR performance over the period 2011-2013 resulted in a 10th position within the ranking of the peer group companies. This did not result in vesting of conditional shares
  • the average position in the RobecoSAM benchmark resulted in a 1.33rd position within the ranking. As a result, the conditional shares of the 2011-2013 series vested for 70.83 percent (series 2010-2012: 66.67 percent), including dividend shares of 10.09 percent, the final vesting percentage amounted to 77.98 percent (series 2010-2012: 73.61 percent)

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 €50.89 per performance-related share (without a holding restriction) conditionally granted in 2013 (2012: €40.38).

The share price of a common AkzoNobel share at year-end amounted to €56.34 (2012: €49.75). For further details on our performance-related share plan, see the Remuneration report.

Performance-related shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Series

 

Balance per January 1, 2013

 

Granted in 2013

 

Vested in 2013

 

Forfeited in 2013

 

Dividend in 20131

 

Balance at December 31, 2013

 

Vested on January 1, 2014

1

Equivalent in shares related to accumulated dividend, which is included in the balances on balance sheet date.

2010 – 2012

 

537,000

 

 

(537,000)

 

 

 

 

2011 – 2013

 

891,339

 

2,588

 

 

(277,846)

 

24,943

 

641,024

 

641,024

2012 – 2014

 

1,074,284

 

31,999

 

 

(24,901)

 

31,853

 

1,113,235

 

2013 – 2015

 

 

753,713

 

 

(12,400)

 

21,646

 

762,959

 

Total

 

2,502,623

 

788,300

 

(537,000)

 

(315,147)

 

78,442

 

2,517,218

 

641,024

Share–matching plan

The members of the Board of Management and the members of the Executive Committee are eligible to participate in the share–matching plan. Under certain conditions, members who invest part of their short-term incentives in AkzoNobel shares may have such shares matched by the company. The investment in AkzoNobel shares in 2013 resulted in a total of 2,820 potential matching shares at year-end (2012: 12,005).

The fair value of the potential matching shares at the date of the share investment is amortized as a charge against income over the three-year vesting period. The fair value was €40.67 per potential matching share in 2013 (2012: €39.72).

Stock option plans

Prior to 2008, performance-related stock options were granted to members of the Board of Management and executives. We have not purchased own shares in connection with the stock option plan. The stock options are equity-settled and all exercisable.

For stock options exercised during 2013, the weighted average of the actual share price at date of exercise amounted to €50.43 (2012: €43.21). A number of 0.5 million outstanding stock options are non-dilutive but could potentially dilute basic earnings per share in the future.

Stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year of issue

 

Exercise price in €

 

Outstanding per January 1, 2013

 

Exercised in 2013

 

Expired in 2013

 

Forfeited in 2013

 

Outstanding at December 31, 2013

 

Expiry date

2006

 

46.46

 

357,636

 

(287,090)

 

(70,546)

 

 

 

April 26, 2013

2007

 

58.89

 

496,489

 

 

 

(2,900)

 

493,589

 

April 26, 2014

Total

 

 

 

854,125

 

(287,090)

 

(70,546)

 

(2,900)

 

493,589

 

 

Number and weighted average exercise price stock options

 

 

 

 

 

 

 

Number of options

 

Weighted average exercise price in €

Balance at January 1, 2012

 

1,203,977

 

49.15

Forfeited during the period

 

(107,875)

 

46.45

Exercised during the period

 

(241,977)

 

34.36

Balance at December 31, 2012

 

854,125

 

53.69

Forfeited during the period

 

(73,446)

 

46.95

Exercised during the period

 

(287,090)

 

46.46

Balance at December 31, 2013

 

493,589

 

58.89