Remuneration Report (continued) Remark on future remuneration policy for 20u and beyond 70 Annual Report 2009 - Heineken N.V. Report of the Supervisory Board Long-term incentive Under the current long-term incentive plan, the vesting of shares depends solely on one performance measure - Total Shareholder Return (TSR) relative to the peer group. The recent unprecedented market volatility related to the collapse of the financial markets, ongoing consolidations in the fast moving consumer goods industry and Heineken's unique share profile have demonstrated a number of difficulties in using relative TSR as a measure of underlying company performance. The Supervisory Board therefore recommends replacing the relative TSR with key fundamental financial performance measures that are critical to the long-term success of Heineken: Organic Gross Profit beia Growth - a measure to drive top-line growth - the key measure of company strength Organic EBIT beia Growth - a measure to drive operational efficiency Earnings Per Share (EPS) beia Growth - a measure of overall long-term company performance Free Operating Cash Flow - a measure to drive focus on cash. These four performance measures have equal weights to encourage sound business decisions for the long-term health of Heineken and minimise the risk that participants over emphasise one success measure to the detriment of others. For each performance measure a threshold, target and maximum performance level is set with the corresponding performance share vesting schedule: threshold performance - 50 per cent of performance shares vest target performance -100 per cent of performance shares vest and maximum performance -150 per cent of performance shares vest. Vesting between the performance levels is on straight-line basis. The performance levels are commercially sensitive and will not be disclosed at the beginning of the performance period. After the performance period, the performance on each of the measures will be reported in the Annual Report. The Supervisory Board may at its sole discretion adjust the number of shares that would have vested under the plan rules based on the above described vesting schedule downwards or upwards if the vesting of shares based on plai rules would produce an unfair result due to extraordinary circumstances. The Supervisory Board can also recover fror the Executive Board any shares which vested on the basis of incorrect financial or other data (clawback provision). This is facilitated by the existing holding period of five years after the date of award of performance shares, which is approximately two years from the vesting date. The Supervisory Board conducted a scenario analysis with respect to possible outcomes of the adjustments made to the remuneration policy concerning variable remuneration as from 2010. The remuneration policy proposed and withdrawn in 2009 included the adoption of a new labour market peer group of European- and UK-based multinational companies operating in the brewing and branded consumer products sectors. Thi new labour market peer group is no longer suggested in the remuneration policy for 2010 as the Supervisory Board believes that the current economical climate and public debate require a high degree of prudency. It is, however, very clear that the global footprint of Heinekei has increased significantly since the adoption of the existing labour market peer group in 2007 and is again likely to increase significantly in 2010, with the intended acquisition of the beer operations of FEMSA. Hence the current predominantly Dutch labour market peer group is still perceived to be suboptimal for the long term. Therefore the Supervisory Board will propose a new labour market peer group for 2011.

Jaarverslagen en Personeelsbladen Heineken

Jaarverslagen | 2009 | | pagina 67