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

Total compensation to key management personnel amounted to €10.8 million (2013: €15.4 million). An amount of €2.6 million relates to short-term employee benefits (2013: €7.0 million); €1.0 million to post-contract benefits and other post-contract compensation (2013: €1.2 million); and €2.7 million to share-based compensation (2013: €5.8 million). The members of the Executive Committee that are not a member of the Board of Management are included in key management personnel.

Supervisory Board

Members of the Supervisory Board receive a fixed remuneration: €130,000 for the Chairman, €78,000 for the Deputy Chairman and €65,000 for the other members (as of May 1, 2014). 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.

Supervisory Board

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total remuneration

 

Remuneration

 

Attendance fee

 

Committee allowance fees

 

Employer’s charges

 

Total remuneration

In €

 

2013

 

 

 

 

 

 

 

 

 

2014

1

Chairman as from April 29, 2014.

2

Until December 22, 2014.

3

Until April 29, 2014.

4

As from April 29, 2014.

Antony Burgmans, Chairman 1

 

70,000

 

103,333

 

2,500

 

18,333

 

 

124,166

Sari Baldauf

 

77,500

 

60,000

 

15,000

 

16,667

 

 

91,667

Dolf van den Brink 2

 

75,000

 

60,000

 

2,500

 

23,333

 

 

85,833

Peggy Bruzelius

 

97,300

 

60,000

 

17,500

 

18,333

 

20,642

 

116,475

Uwe-Ernst Bufe, Deputy Chairman

 

77,500

 

72,000

 

15,000

 

 

 

87,000

Peter Ellwood 3

 

86,400

 

16,667

 

7,500

 

5,000

 

1,530

 

30,697

Byron Grote 4

 

 

43,333

 

10,000

 

13,333

 

 

66,666

Louis Hughes

 

98,900

 

60,000

 

30,000

 

18,333

 

3,900

 

112,233

Ben Verwaayen

 

80,500

 

60,000

 

12,500

 

13,333

 

3,900

 

89,733

Karel Vuursteen 3

 

123,900

 

33,333

 

 

5,000

 

1,930

 

40,263

Total

 

787,000

 

568,666

 

112,500

 

131,665

 

31,902

 

844,733

Shares held by the members of the Supervisory Board

 

 

 

 

 

Number of shares at year-end

 

2013

 

2014

1

In the form of ADRs.

Antony Burgmans

 

500

 

500

Sari Baldauf

 

 

Uwe-Ernst Bufe

 

500

 

500

Peggy Bruzelius

 

500

 

500

Byron Grote 1

 

 

392

Louis Hughes

 

538

 

548

Ben Verwaayen

 

 

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 Supervisory 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.

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.

Board remuneration 2013

 

 

 

 

 

 

 

 

 

 

 

 

 

In €

 

Salary

 

Short-term incentives

 

Other short-term benefits

 

Post-contract benefits

 

Share-based compensation

 

Total remuneration

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

Total

 

1,436,000

 

939,000

 

310,600

 

513,400

 

1,665,600

 

4,864,600

Board remuneration 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

In €

 

Salary

 

Short-term incentives 3

 

Other short-term benefits

 

Post-contract benefits

 

Share-based compensation

 

Total remuneration

1

As from September 15, 2014.

2

Until June 30, 2014.

3

This concerns the short-term incentive amounts over 2014, to be paid in 2015.

Ton Büchner

 

834,000

 

783,000

 

8,500

 

325,000

 

1,233,100

 

3,183,600

Maëlys Castella 1

 

176,800

 

106,100

 

5,400

 

28,800

 

 

317,100

Keith Nichols 2

 

308,000

 

308,000

 

315,500

 

147,900

 

(766,000)

 

313,400

Total

 

1,318,800

 

1,197,100

 

329,400

 

501,700

 

467,100

 

3,814,100

Short-term incentive

The short-term incentives for 2014 are linked to ROI (20 percent), OPI (20 percent), OCF (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 (€278,700) related to employer’s contribution in the UK. The other costs for Mr. Nichols (€36,800) related to home allowances.

Post-contract compensation

This refers to compensation intended for building up retirement benefits instead of pension contributions. The compensation is based on age and is calculated over the 2014 remuneration. For the CEO, the contributions are paid over the base salary in the current year and the short-term incentive of the previous year. The contributions will therefore vary depending on the performance during the previous year and the age of the Board member. For the CFO, these contributions are paid on base salary only.

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 €44.60 per performance-related share conditionally granted in 2014 for those members of the Board of Management facing a two-year holding restriction (2013: €42.30), and €54.55 for those members whose holding restriction will lapse after the end of their term (2013: €52.15). The fair value for the shares related to the share-matching plan amounted to €49.96 (2013: €40.67).

Performance-related shares

With regard to the performance-related shares granted to the members of the Board of Management in 2012, the final vesting percentage of the series 2012-2014 equaled 75.00 percent (series 2011-2013: 70.83 percent), including dividend shares 82.22 percent (series 2011-2013: 77.98 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, 2014

 

Granted in 2014

 

Vested in 2014

 

Forfeited in 2014

 

Dividend in 2014

 

Balance at December 31, 2014

 

Vested on January 1, 2015

Ton Büchner

 

2012 – 2014

 

34,066

 

 

 

(8,517)

 

679

 

26,228

 

26,228

 

 

2013 – 2015

 

24,907

 

 

 

 

661

 

25,568

 

 

 

2013 – 2016

 

 

22,300

 

 

 

592

 

22,892

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Keith Nichols

 

2011 – 2013

 

14,504

 

 

(14,504)

 

 

 

 

 

 

2012 – 2014

 

25,523

 

 

 

(25,523)

 

 

 

 

 

2013 – 2015

 

18,731

 

 

 

(18,731)

 

 

 

Share-matching plan

The CEO is required to build up, over a five-year period from the date of appointment, and then hold, at least three times his gross base salary in AkzoNobel shares for the duration of their tenure as member of the Board of Management. For other Board of Management members, the requirement is at least one time their gross base salary. Under certain conditions, members who invest part of their short-term incentives in AkzoNobel shares may have such shares matched by the company. See the Remuneration report.

Number of potential matching shares

 

 

 

 

 

 

 

 

 

 

 

 

 

Year of share investment

 

Potential match

 

Matched in 2014

 

Forfeited in 2014

 

Balance at year-end 2014

Ton Büchner

 

2012

 

11,582

 

 

 

11,582

 

 

2012

 

1,429

 

 

 

1,429

 

 

2014

 

2,450

 

 

 

2,450

Shares held by the Board of Management

 

 

 

 

 

Number of shares at year-end

 

2013

 

2014

Ton Büchner

 

16,243

 

21,901

Former members of the Board of Management

In 2014, charges for former members of the Board of Management amounted to €2.5 million (2013: €4.8 million) mainly due to accrued taxation on excessive pay (‘Belastingheffing excessieve beloningsbestanddelen’).