Remuneration Report
I' production
Part I - Executive Board remuneration policy
Report of the Supervisory Board
Heineken's Executive Board remuneration policy reflects
our long-standing remuneration principles of supporting
the business strategy, paying for performance and
paying competitively and fairly. These core principles
remain unchanged as we address the challenges of the
current external economic crisis and work to turn them
into a long-term advantage for our Company and
shareholders. In 2009 the Remuneration Committee
reviewed the policy to ensure continuing compliance
with our remuneration principles, best corporate
governance practices and alignment with our business
priorities. Recommended adjustments to the policy by
the Supervisory Board will be submitted to the 2010
Annual General Meeting of Shareholders.
The Remuneration Report includes three sections:
Part I - Describes the current Heineken Executive Board
remuneration policy, which was adopted by the Annual
General Meeting of Shareholders in 2005 and subsequently
adjusted in 2007
Part II - a. Provides details of the remuneration received
by the Executive Board in 2009 and b. Describes the
changes made to align this remuneration to the principles
of the current policy
Part III - Outlines the adjustments to the current policy
to be submitted to the 2010 Annual General Meeting
of Shareholders.
Remuneration principles
Heineken's Executive Board remuneration policy is designed
to meet four key objectives:
Support the business strategy - We align our remuneration
programmes with business strategies focused on creating
long-term growth and shareholder value, while
maintaining a tight focus on short-term financial results;
Pay for performance - We set clear and measurable goals
for our short- and long-term incentives and pay higher
compensation when goals are exceeded and lower
compensation when goals are not met;
Pay competitively - We set target remuneration to be
competitive with other multinational corporations of
similar size, value and complexity; and
Pay fairly - We set target remuneration to be internally
consistent and fair. We regularly review internal pay
relativities between the Executive Board and senior
managers and aim to achieve consistency and alignment
where possible.
Summary overview of remuneration elements
The Executive Board remuneration policy is simple
and transparent in design and consists of the following
key elements:
R< itineration element
Description
Strategic role
E se salary
Fixed cash compensation based on level of
responsibility and performance
Target level set at the median of the labour
market peer group
Attraction
Reward for performance of day-to-day
activities
ort-term incentive
Variable cash payment based on achievement
of annual objectives
75% of incentive opportunity is based on
financial and operational measures, 25% on
individual objectives
Drive and reward annual Heineken
performance
L tg-term incentive
F nsion
Variable long-term remuneration element paid Drive and reward long-term performance:
in Heineken N.V. shares - Increase shareholder value
Vesting of shares is based on meeting three- - Focus on long-term sustained success
year Heineken N.V. performance objectives Executive retention
Share ownership
Defined contribution plan
or
Capital Creation plan
Provide for employee welfare and retirement
needs
Annual Report 2009 - Heineken N.V. 65
