Remuneration Report
Report of the Supervisory Board
The Executive Board's remuneration policy reflects our longstanding remuneration
principles of supporting the business strategy, paying for performance and paying
competitively and fairly. The policy and underlying principles continue to support us
in facing ongoing economic challenges in many of our markets. Contrary to 2010
and 2011 the Supervisory Board concluded that there were no reasons to recommend
policy adjustments to the Annual General Meeting of Shareholders for 2012. As compared
to previous years the transparency of the disclosure of objectives and achievements
of the short-term variable pay has been improved in this Report.
Introduction
The Remuneration Report includes two sections:
Part I - Describes the current Executive Board remuneration policy, which was adopted by the Annual General Meeting
of Shareholders in 2005 and subseguently adjusted in 2007,2010 and 2011
Part II - Provides details of the remuneration received by the Executive Board for 2011
Part I - Executive Board remuneration policy
Remuneration principles
The Executive Board's 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-term variable pay and long-term variable
award 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:
Remuneration elementDescriptionStrategic role
Base salary
Fixed cash compensation based on level
Attraction
of responsibility
Reward for performance of day-to-
Target level set at the median of the labour
day activities.
market peer group.
Short-term variable pay
Variable payment based on achievement
Drive and reward annual
of annual objectives
HEINEKEN performance
75 per cent of variable pay opportunity is based
Drive and reward sound business decisions
on financial and operational measures, 25 per cent
for the long-term health of HEINEKEN
on individual leadership targets
Align Executive Board and shareholder interest.
Partly paid in cash and partly in investment shares
with a holding restriction of five calendar years
Investment shares are matched on a 1:1 basis
after the holding period.
Long-term variable award
Variable long-term remuneration element paid
Drive and reward sound business decisions
in Heineken N.V. shares
for the long-term health of HEINEKEN
Vesting of shares is based on meeting three-year
Align Executive Board and shareholder interest
Heineken N.V. performance objectives
Support Executive retention.
Five-year holding restriction after the date of the
award (i.e. approximately two years after vesting).
Pension
Defined Contribution plan or
Provide for employee welfare and
60 Heineken N.V. Annual Report 2011