Note 21: Remuneration of the Supervisory Board and the Board of Management

Total compensation to key management personnel amounted to €13.3 million (2014: €10.8 million). An amount of €7.6 million relates to short-term employee benefits (2014: €7.1 million); €1.1 million to post-contract benefits and other post-contract compensation (2014: €1.0 million); and €4.6 million to share-based compensation (2014: €2.7 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. 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 €

 

2014

 

 

 

 

 

 

 

 

 

2015

1

Until April 22, 2015.

2

As of May 1, 2015.

Antony Burgmans, Chairman

 

124,200

 

130,000

 

2,500

 

20,000

 

 

152,500

Sari Baldauf

 

91,700

 

65,000

 

12,500

 

20,000

 

 

97,500

Peggy Bruzelius

 

116,500

 

65,000

 

15,000

 

20,000

 

10,300

 

110,300

Uwe-Ernst Bufe 1

 

87,000

 

26,000

 

5,000

 

 

 

31,000

Byron Grote

 

66,700

 

65,000

 

15,000

 

23,300

 

 

103,300

Louis Hughes

 

112,200

 

65,000

 

30,000

 

21,700

 

3,600

 

120,300

Dick Sluimers 2

 

 

43,300

 

2,500

 

13,300

 

 

59,100

Ben Verwaayen

 

89,700

 

65,000

 

15,000

 

15,000

 

3,600

 

98,600

Total

 

688,000

 

524,300

 

97,500

 

133,300

 

17,500

 

772,600

Shares held by the members of the Supervisory Board

 

 

 

 

 

Number of shares at year-end

 

2014

 

2015

1

In the form of ADRs.

Antony Burgmans

 

500

 

551

Sari Baldauf

 

 

Peggy Bruzelius

 

500

 

500

Byron Grote 1

 

392

 

1,333

Louis Hughes

 

548

 

548

Ben Verwaayen

 

 

Dick Sluimers

 

 

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 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

In €

 

Salary

 

Short-term
incentives

 

Other short-term benefits

 

Post-contract compensation

 

Share-based compensation

 

Total
remuneration

1

As from September 15, 2014.

2

Until June 30, 2014.

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

Board remuneration 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

In €

 

Salary

 

Short-term
incentives 1

 

Other short-term benefits

 

Post-contract compensation

 

Share-based compensation

 

Total
remuneration

1

This concerns the short-term incentive amounts over 2015, to be paid in 2016.

Ton Büchner

 

859,000

 

915,800

 

8,200

 

356,700

 

1,303,600

 

3,443,300

Maëlys Castella

 

585,000

 

405,400

 

8,200

 

87,800

 

236,300

 

1,322,700

Total

 

1,444,000

 

1,321,200

 

16,400

 

444,500

 

1,539,900

 

4,766,000

Short-term incentive

The short-term incentives for 2015 are linked to  (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.

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 2015 remuneration. For the CEO, the contributions are paid over the base salary in the current year and the short-term incentive related to that year. For the CFO, these contributions are paid on base salary only.

Share-based compensation

The costs for share-based compensation are non-cash and relate 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 €45.47 per performance-related share conditionally granted in 2015 for those members of the Board of Management facing a two-year holding restriction (2014: €46.91), and €54.11 for those members whose holding restriction will lapse after the end of their term (2014: €57.37). The fair value for the shares related to the share-matching plan amounted to €67.81 (2014: €49.96).

Performance-related shares

With regard to the performance-related shares granted to the members of the Board of Management in 2013, the final vesting percentage of the series 2013-2015 equaled 90.29 percent (series 2012-2014: 75.00 percent), including dividend shares 97.48 percent (series 2012-2014: 82.22 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, 2015

 

Granted in 2015

 

Vested in 2015

 

Forfeited in 2015

 

Dividend in 2015

 

Balance at December 31, 2015

 

Vested on January 1, 2016

Ton Büchner

 

2012 – 2014

 

26,228

 

 

(26,228)

 

 

 

 

 

 

2013 – 2015

 

25,568

 

 

 

(2,536)

 

558

 

23,590

 

23,590

 

 

2014 – 2016

 

22,892

 

 

 

 

498

 

23,390

 

 

 

2015 – 2017

 

 

22,500

 

 

 

493

 

22,993

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Maëlys Castella

 

2015 – 2017

 

 

 

15,300

 

 

 

335

 

15,635

 

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 his 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 2015

 

Forfeited in 2015

 

Balance at year-end 2015

Ton Büchner

 

2012

 

11,582

 

 

 

11,582

 

 

2013

 

1,429

 

 

 

1,429

 

 

2014

 

2,450

 

 

 

2,450

 

 

2015

 

2,252

 

 

 

2,252

 

 

 

 

 

 

 

 

 

 

 

Maëlys Castella

 

2015

 

305

 

 

 

305

Shares held by the Board of Management

 

 

 

 

 

Number of shares at year-end

 

2014

 

2015

Ton Büchner

 

21,901

 

44,683

Maëlys Castella

 

 

610

Former members of the Board of Management

In 2015, charges for former members of the Board of Management amounted to €0.6 million (2014: €2.5 million) mainly due to accrued taxation on excessive pay (“Belastingheffing excessieve beloningsbestanddelen”).

ROI (return on investment)

This is a key profitability measure and is calculated as operating income as a percentage of average invested capital.