Implementation of the remuneration policy in 2013

The Supervisory Board ensures that the remuneration policy, and its implementation, are aligned with the company’s objectives. Both the policy itself, and the checks and balances 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 with regard to 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.

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. The peer group currently consists of the following companies:

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

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 2013 (see below) presents an overview of the remuneration of the members of the Board of Management who were in office in 2013. Reference is made to Note 22 of the Financial statements for more details. The implementation of the remuneration policy in 2013 will be a separate agenda item at the 2014 AGM.

Base salary

The base salaries of members of the Board of Management increased by 2.26 percent in 2013.

Compensation overview members of the Board of Management 2013

 

 

 

 

 

 

 

 

 


in €

 

Ton Büchner
Chief Executive Officer

 

Keith Nichols
Chief Financial Officer

 

Leif Darner1
Board member Performance Coatings

 

Tex Gunning1
Board member Decorative Paints

1

Until April 26, 2013.

2

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

3

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

4

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

5

Other compensation refers to compensation for living expenses and home leave allowances (Mr. Darner & Mr. Nichols).

Base salary

 

820,000

 

616,000

 

200,700

 

200,700

Short-term incentive

 

630,900

 

308,100

 

 

Share awards2

 

807,700

 

857,900

 

996,900

 

1,367,600

Post-employment benefits

 

291,600

 

221,800

 

 

Other post-employment benefits3

 

 

 

58,900

 

58,900

Other emoluments4

 

8,100

 

228,900

 

2,500

 

2,700

Other compensation5

 

 

73,600

 

50,700

 

Total remuneration

 

2,558,300

 

2,306,300

 

1,309,700

 

1,629,900