REMUNERATION REPORT 63 The remuneration policy and structure reflects the strategic ambitions of the Company and takes into account internal and external circumstances. The policy seeks to maintain a tight focus on both short-term and long-term strategic results. A review of the policy is conducted every two years. The existing policy was approved in the Annual General Meeting of Shareholders in 2005 and adjusted i 12007. Adjustments to the policy, as f om 1 January 2009, will be submitted to the Annual General Meeting of Shareholders 2009. HEINEKEN N.V. ANNUAL REPORT 2008 P muneration Executive Board as from 2007 1 ie remuneration package of the Executive Board includes a oase salary, a short-term incentive and a long-term i centive. Base salary accounts for 33 per cent of the total r muneration package at target level for the CEO and 40 per c nt for the CFO. Target percentage for both the short- and I ng-term incentive is 100 per cent of base salary for the CEO id 75 per cent for the CFO. The equal division of variable I iy between short- and long-term incentive ensures a t lanced focus, on both short- and long-term performance. e Company aims to achieve consistency in the structure the remuneration packages of both Executive Board i embers and senior Heineken executives. The variable ements in Executive Board members' remuneration are are strongly emphasised than those of senior executives, fleeting the principle of increasing performance sensitivity i line with the impact on Group results. )th internal pay relativities and relevant market data are ed to define the remuneration package for the Executive i >ard. For market data, a specific labour market is defined. ie reference for market data according to the existing ilicy is primarily other Dutch multinational companies, reflect the specific business of Heineken a minority of i ntinental European companies that operate in the branded •nsumer products markets are included. The labour market er group consists of the following companies: Akzo Nobel (NL), Anheuser-Busch InBev (B), Henkei (G), Koninklijke Ahold (NL), Koninklijke DSM (NL), Koninklijke KPN (NL), Koninklijke Numico (NL)*, Koninklijke Philips (NL), Nestlé (CH), L'Oréal (F), Reed Elsevier (NL), TNT (NL), Unilever (NL). Replacement of Koninklijke Numico N.V., following its take-over, is part of the revised policy as per 2009. Base salary The members of the Executive Board are paid at the median of the labour market peer group. This represents €750,000 for the CEO and €550,000 for the CFO. Short-term incentive The focus of the short-term incentive is on annual operational performance. Organic net profit growth is the measure used to assess the operational performance of Heineken on a one-year basis and accounts for 75 per cent. Each year, the Supervisory Board determines an ambitious, yet realistic organic net profit growth target. The threshold level of payout is set at 60 per cent of target. A linear payout curve applies. Part of the payout is subject to meeting an acceptable cash conversion rate. The remaining 25 per cent is linked to yearly personal targets. The specific targets are commercially sensitive and cannot be disclosed. At target level, the short-term incentive level for the CEO is €750,000 and for the CFO €412,500. The maximum payout will not exceed 1.5 times the target level. As not all targets were met in 2008, the pay out for the 2008 bonus of the Executive Board is 81.5 per cent of target, translating into a short-term bonus of €611,250 for the CEO and €336,187 for the CFO. Long-term incentive The long-term incentive plan for the Executive Board, in effect since 1 January 2005, is a performance share plan. A similar plan was implemented for senior management in 2006. Each year a number of performance shares are conditionally awarded, the vesting of which is subject to meeting a stretching performance target after three years. The value of the performance shares at target level for 2008 for the CEO is €750,000 and for the CFO €412,500. The performance condition according to the existing policy is Total Shareholder Return (TSR), measured over a three-year period, relative to a performance peer group. The

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