In 2006 the base salaries will be adjusted towards
policy levels, i.e. for the Executive Board members
to €525,000 and for the Chairman to €680,000.
SI ort-term incentive
In 2005, a new short-term incentive was introduced.
At target level, the short-term incentive level for
the Chairman is €422,500 and for the members
of the Executive Board €325,000.
Tne emphasis of the short-term incentive is
on annual operational performance. Organic
net profit growth is the strategic measure to
a sess the operational performance of Heineken
o a one-year basis and accounts for 75 percent
c the bonus opportunity.
E ch year, the Supervisory Board determines an
a; ibitious, yet realistic organic net profit growth
t get. The threshold level of pay-out is set at
6 oercent of the target level of pay-out. A linear
P y-out curve applies. The maximum pay-out
v II not exceed 1.4 times the target bonus level.
P rt of the pay-out is subject to meeting an
a ceptable cash conversion rate
f e remaining 25 percent of the short-term
entive is linked to yearly targets. The specific
t gets qualify as commercially sensitive
ormation and cannot be disclosed.
In 2005 the performance was above maximum
level. As a result thereof the maximum bonus will
be paid (see also page 102).
Long-term incentive
The Annual General Meeting of Shareholders 2005
approved the long-term incentive plan for the
Executive Board. It is a performance-based share
plan. A similar plan has been implemented for
senior management in 2006.
Each year, a number of shares is conditionally
awarded, subject to meeting a stretching
performance target after three years. The value
of the shares that are conditionally awarded equals
€325,000 for the members of the Executive Board
and €422,500 for the Chairman. Based on the
share price as per 31 December 2004, €24.53,
this corresponds to 13,250 shares for the members
of the Executive Board and 17,224 shares for the
Chairman in 2005. Based on the share price as per
31 December 2005, €26.78, this corresponds to
12,136 shares for the members of the Executive
Board and 15,777 shares for the Chairman in 2006.
Heineken N.V.
- Annual Report 2005