16 Heineken N.V. Annual Report 2004 Report of the Supervisory Board
Remuneration policy as from 2005
As from 2005, a new remuneration policy will be introduced. The remuneration policy is subject
to shareholder adoption. It will take into account both company specific circumstances and the social
context in determining the timing of implementation.
The policy aims to ensure that highly qualified managers can be attracted and retained as
members of the Executive Board. The remuneration package is composed as such that it provides
a strong focus on the strategic short and long-term performance of the Company.
Remuneration structure
The remuneration package of the Executive Board will include a base salary, an annual bonus and
a long-term incentive. With the remuneration policy fully implemented, the fixed salary will account
for 45% of the total remuneration package. The variable remuneration is divided equally between
short-term and long-term. This will ensure a balanced focus, on both short-term and long-term
performance.
The company aims at consistency in the structure of the remuneration packages of both Executive
Board members and senior Heineken executives. The performance-related elements in Executive
Board members' remuneration will be emphasized more strongly than those of senior executives,
reflecting the principle of increasing performance sensitivity in line with the ability to impact on
group results.
To determine the remuneration package for the members of the Executive Board, internal pay
relativities and relevant market data have been used. For internal pay relativities, it was assessed
what differential would fairly reflect the different levels of responsibility between the Executive
Board and senior executives.
For the market reference, a specific labour market was defined. The remuneration package of the
Chairman will be based on a premium of 30% above the remuneration level of the other members
of the Executive Board.
Heineken operates in a highly international labour market peer group and is headquartered in
the Netherlands. Consequently, the main reference for market competitive salary levels will be
primarily other Dutch multinational companies (75%)- To reflect the specific business of Heineken
a minority of Continental European companies that operate in the market of branded consumer
products will be included (25%).
Heineken Labour Market Peer Group
Akzo Nobel (NL)
DSM (NL)
Reed Elsevier (NL)
Royal Ahold (NL)
Royal KPN (NL)
Royal Numico (NL)
TPG (NL)
Unilever (NL)
VNU (NL)
Wolters Kluwer (NL)
Inbev (B)
Henkei (G)
L'Oreal (F)
Nestle (CH)
