Heineken N.V. Annual Report 2004 Report of the Supervisory Board In a separate section of the annual report, a detailed overview is submitted on how Heineken N.V. applies the Dutch Corporate Governance Code: the 'Comply or Explain' report. The existing regulations for the Executive Board, Supervisory Board and its committees were adapted according to the Dutch Corporate Governance Code and, where necessary new regulations have been made. By the end of 2004 the different regulations were published on the website. Articles of Association A proposal for the amendment of the Articles of Association will be submitted to the Annual General Meeting of Shareholders on 20 April 2005. The amendments take account of the changes in Dutch Company Law and the Dutch Corporate Governance Code of 9 December 2003. Remuneration policy of the Executive Board General This report sets out the policy as applied in 2004. It also outlines the proposed policy as from 2005, including a new long term incentive. The remuneration policy of Heineken was reviewed in 2004 to ensure that business objectives are most effectively met, to be in line with the culture and values of the company and to comply with the highest standards of good corporate governance. The proposed remuneration policy will emphasize performance related pay. The total remunera tion of the Executive Board will be competitive if ambitious performance targets on the short and long-term are met. In combination with performance targets for variable pay elements, fixed salary levels will be adjusted for the first time since 1999. The proposed remuneration policy is subject to shareholder adoption and the proposed long-term incentive is subject to shareholder approval, as this is a share-based plan. Remuneration policy as applied in 2004 The remuneration of the members of the Executive Board consists of a base salary, an annual profit-sharing bonus and a long-term bonus. The Supervisory Board determined the level and structure of the remuneration package for the last time in 1999. For the Executive Board, at target level of performance, fixed salary accounts on average for 42% of the total remuneration package. This is in line with the policy to focus on variable, performance- related remuneration. The base salary was determined in 1999 on the basis of internal pay ratios and market data. There have been no subsequent adjustments. The 2004 annual base salary for the Chairman is €543,000 and for the members of the Executive Board €358,000. The annual bonus is related to the dividend distribution, expressed as a percentage of the nominal value of the shares. A basic sum, €32,521 for the Chairman and €19,781 for each member of the Executive Board, is multiplied by the number of percentage points by which the dividend exceeds 6%. Based on the performance over 2004, the bonuses payable to the Executive Board will be €617,899 for the Chairman and €375,839 for the members of the Executive Board. The long-term bonus is paid whenever Heineken N.V. makes an issue of bonus shares or undertakes a share split, which in the past has averaged once every three years. It is calculated on the same basic sums as for the annual bonus but, instead of the dividend distribution, it is related to the actual net profit in the period to which the bonus refers (in the past, therefore, generally three years). One-third of the net profit is expressed as a percentage of the nominal share capital (share splits being treated as recapitalisations) and the basic sum is multiplied by the number of percentage points by which this exceeds 6%. The annual bonuses paid in the period concerned are deducted from the figure calculated on this basis. In 2004, the payment for the period 2001-2003 amounted to €897,412 for the Chairman and €534,087 for the members of the Executive Board.

Jaarverslagen en Personeelsbladen Heineken

Jaarverslagen | 2004 | | pagina 20