This is caused by the fact that existing base salary levels
have been in place since 2007 and the proposal for a new
remuneration policy in 2009 was withdrawn. Based on these
findings of the Remuneration Committee, the Supervisory
Board decided to correct the internal pay equity and close
the salary gap with the median of the peer group in 2009.
The table below sets out the new base salaries for 2010.
Base salary Base salary Effective date for
in EURin EUR 2010 base salary
Van Boxmeer 750,000 950,000 2010
Hooft Graafland 550,000 650,0002010
addition the Supervisory Board decided to increase the
rget LTI award amount from 100 per cent to 125 per cent of
base salary for the CEO and from 75 per cent to 100 per cent
the base salary for the CFO. Together with the adjusted
t se salary, this will increase the total remuneration for both
1 embers of the Executive Board to the median of the labour
arket peer group. For the CFO it implies a somewhat higher
t tal remuneration than for regular peer group CFOs,
j stifled by the broader than normal responsibilities he holds.
e increased target LTI award amount will also emphasise
ie long-term variable component over the short-term
centive thereby increasing the portion of overall
mpensation paid on the basis of Heineken's long-term
ccess. Until 2010, there was an equal division of variable
f iy between short- and long-term incentive, which in light
market developments the Supervisory Board no longer
rt III - Adjustments to the Executive Board
tiuneration policy as from 2010
ie Supervisory Board adopted the following adjustments
the recommendation of the Remuneration Committee
the remuneration policy as at 1 January 2010, which are
bmitted to the Annual General Meeting of Shareholders
r approval. Our core remuneration principles of supporting
e business strategy, paying for performance and paying
mpetitively and fairly remain unchanged and the following
lustments are proposed to further strengthen the link
tween pay and performance, more effectively drive
ineken's long-term success and comply with the best
actices of the Dutch Corporate Governance Code.
The following adjustments to the remuneration policy
1. Short-term incentive - Revision of performance measures
2. Long-term incentive - Revision of performance measures.
The recent turbulent economic environment has demonstrated
the need to modify the ST1 measures on an annual basis to
respond timely to the changing business conditions.
Therefore, the Supervisory Board recommends modifying
the current policy to allow setting specific financial and
operational measures on an annual basis. In line with the
current policy, the financial and operational measures will
still account for 75 per cent of the STI payout and individual
leadership targets will account for 25 per cent.
At the beginning of the year, the Supervisory Board will then
establish financial and operational performance measures
and targets for the Executive Board to achieve based on
Heineken's business priorities. These are commercially
sensitive and will not be disclosed at that moment. At the end
of the year, the Supervisory Board reviews the Company's
and individual performance against these set measures and
targets and then approves the STI payout levels based on the
achieved performance. In the Annual Report, the performance
measures and their relative weight used will be reported
after the end of the year.
For threshold, target and maximum performance the
following STI payout as a per cent of target applies:
Threshold performance - 50 per cent of target (reduced
from 60 per cent under the current policy)
Target performance - 100 per cent of target (no change
from the current policy)
Maximum performance -150 per cent of target (no
change from the current policy).
The target annual STI opportunity remains 100 per cent
of base salary for the CEO and 75 per cent of base salary
for the CFO.
In line with the current policy, the Supervisory Board may at
its sole discretion in determining the final payout adjust the
short-term incentive amount that would have been payable
under the plan rules downwards or upwards if the payout
based on plan rules would produce an unfair result due to
extraordinary circumstances. The Supervisory Board can
also recover from the Executive Board any STI payment
made on the basis of incorrect financial or other data
Annual Report 2009 - Heineken N.V. 69