Remuneration Report
Heineken's Executive Board remuneration
policy reflects our long-standing remuneration
principles of supporting the business strategy,
laying for performance and paying competitively
nd fairly. These core principles remain
nchanged as we address the challenges of the
conomy and our increased global footprint,
Fter having acquired the beer business of
EMSA. As announced during the 2010 Annual
eneral Meeting of Shareholders, the
amuneration Committee reviewed the policy
uring 2010 to ensure competitiveness in a
lore relevant labour market peer group,
acommended adjustments to the policy by the
upervisory Board will be submitted to the 2011
nnual General Meeting of Shareholders to
ïinforce the aforementioned core principles.
53
roduction
ie 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 and 2010
Part II - Provides details of the remuneration received by
the Executive Board in 2010
Part III - Outlines the adjustments to the current policy
to be submitted to the 2011 Annual General Meeting
of Shareholders.
Part I - Executive Board remuneration policy
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, whilst 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:
Base salary
Base salaries are determined by reference to the relevant peer
group of companies and are targeted to be at the median level
of the peer group. Every year base salary levels are reviewed
and the Remuneration Committee proposes appropriate
adjustments to the Supervisory Board for approval taking into
account external peer group data and internal pay relativities.
muneration element
Description
ase salary
iort-term incentive
tng-term incentive
tnsion
Fixed cash compensation based on level of
responsibility
Target level set at the median of the labour
market peer group.
Variable cash payment based on achievement
of annual objectives
75 per cent of incentive opportunity is based
on financial and operational measures, 25 per
cent on individual leadership targets.
Variable long-term remuneration element
paid in Heineken N.V. shares
Vesting of shares is based on meeting three-
year Heineken N.V. performance objectives
Five-year holding restriction after the date of
the award (equals approximately two years
after vesting).
Defined contribution plan or
Capital Creation plan.
Attraction
Reward for performance of day-to-day
activities.
Drive and reward annual Heineken
performance.
Drive and reward sound business decisions for
the long-term health of Heineken
Align Executive Board and shareholder
interests
Executive retention.
Provide for employee welfare and retirement
needs.
■ineken N.V. Annual Report 2010