64
REMUNERATION REPORT CONTINUED
REPORT OF THE SUPERVISORY BOARD
HEINEKEN N.V. ANNUAL REPORT 20( 8
performance peer group is different from the labour market
peer group and includes companies with which Heineken
competes for shareholder preference. It is composed of other
brewers, but also includes European companies operating in
the branded consumer products market. The performance
peer group consists of the following companies:
Anheuser-Busch InBev (B),
Cadbury (UK),*
Carlsberg (DK),
Danone (F),*
Diageo (UK),
Henkei (G),
LVMH (F),
Nestle (CH),
L'Oréal (F),
SABMiller (UK),
Unilever (NL).
Following its take-over, Anheuser-Busch has been replaced in the performance
peer group by Cadbury. The replacement has effect as of the plan period
2006 - 2008. Following its take-over, Scottish Newcastle has been replaced
in the performance peer group by Danone. The replacement has effect as of
the plan period 2006 - 2008.
If, over a three-year period, Heineken performs better
than the median of the peer group a proportion of the
performance shares will vest. A linear vesting schedule
applies from position 6 to position 1. At position 3 the
targeted amount of performance shares will vest. At position
1 the maximum number of performance shares will vest.
This is 1.5 times the target amount of shares. The net vested
shares are subject to a holding restriction of two years.
At the end of 2008 Heineken was ranked as follows for the
running LTIP performance period:
Period 2008 - 2010:10th
Period 2007 - 2009: 8th
Period 2006 - 2008: 8th
Heineken is acquiring the shares that are required for
vesting.
The Executive Board performance share allocation at target
level is as follows:
For the year starting 1 January 2006, based on the
share price of €26.78 at 31 December 2005,15,777
performance shares for the CEO and 12,136
performance shares for the CFO. On the basis of the
fulfilment of the performance condition (TSR ranking
for the LTIP performance period 2006 - 2008 at
eighth position), no performance shares will vest.
For the year starting 1 January 2007, based on the
share price of €36.03 at 31 December 2006, 20,816
performance shares for the CEO and 11,449 performancr
shares for the CFO. These will vest, subject to the
fulfilment of the performance condition, in 2010.
For the year starting 1 January 2008, based on the
share price of €44.22 at 31 December 2007,16,960
performance shares for the CEO and 9,328 performance
shares for the CFO. These will vest, subject to the
fulfilment of the performance condition, in 2011.
Pensions
The pension policy (as from 2006) is based on the principle c f
defined contribution. Executive Board members can choose
to participate in the Defined Contribution Plan or to allocate
within the fiscal rules, the amounts into a Capital Creation
option. In the Defined Contribution Plan, apart from the
survivor's pension, a separate lump sum of two times base
salary will be paid in the event of death whilst in service.
In the Capital Creation option the Executive Board member
may elect to receive as income the Defined Contribution
premium amounts from the pension scheme, less an amoun
equivalent to the employee contribution. Instead of a
survivor's pension, a lump sum of, depending on age, ten,
eight, six or four times base salary will be paid, in the event
of death whilst in service.
The retirement age is 65, but individual Executive Board
members may retire earlier with a reduced level of benefit.
Contribution rates are designed to enable the current
Executive Board members to retire from the Company
at the age of 62.
Contracts
The contracts of the Executive Board are for an indefinite
period of time. The general notice period is six months for
the Company and three months for the members of the
Executive Board. There is no specific scheme in the event
of dismissal.
Shares held by the Executive Board
As at 31 December 2008, in addition to the above-mentione
performance shares, Mr. van Boxmeer held 9,244 shares of
Heineken N.V. and Mr. Hooft Graafland held 6,544 shares of
Heineken N.V.
Mr. Hooft Graafland held 3,052 shares of Heineken Holding
N.V. as per 31 December 2008.
