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Report of the Report of the
Contents Overview Executive Board Supervisory Board
Financial
statements
Other information
29. Share-based payments - Long-Term Variable Award
The annual share rights granted to the Executive Board and senior management are as follows:
Based on
Grant date/employees entitled Number* share price
Share rights granted to Executive Board in 2011
65,072
36.69
Share rights granted to senior management in 2011
730,090
36.69
Share rights granted to Executive Board in 2012
66,746
35.77
Share rights granted to senior management in 2012
703,382
35.77
Share rights granted to Executive Board in 2013
50,278
50.47
Share rights granted to senior management in 2013
560,863
50.47
*The number of shares is based on target performance.
The impact of the economic downturn on the pre-2014 performance has rendered the long-term incentive awards over the
performance periods 2012-2014 and 2013-2015 ineffective for post-2013 performance. Therefore, the performance conditions for
these plans have been recalibrated to restore the effectiveness of these awards as stretching performance incentives for the years
2014 and 2015. This has been done for the entire senior management population upon discretion by the Executive Board, and for
the Executive Board, albeit at more stretching levels, upon discretion by the Supervisory Board. There was no incremental fair value of
the underlying eguity instruments granted. Elowever due to the adjustment of the performance conditions the expected vesting of
the outstanding awards has been revised accordingly. The fair value impact has been determined in accordance with the accounting
policy for share-based payments (Note 3k (v)). The performance conditions of the long-term variable award over the performance
period 2011-2013 have not been recalibrated.
For the long-term variable awards over performance periods 2013-2015 and beyond the Supervisory Board has agreed for the CEO in
the context of his re-appointment in 2013, that resignation will gualify as retirement going forward. Given existing agreements per
2005 for a specific group of senior managers (including the current Executive Board members), this implies that such unvested LTV
awards at resignation will continue to vest at their regular vesting dates, insofar and to the extent that pre-determined performance
conditions are met. This agreement will not apply in case of dismissal by the Company for an urgent reason within the meaning of
the law ('dringende reden'), or in case of dismissal for cause ('gegronde reden') whereby the cause for dismissal concerns
unsatisfactory functioning.
Based on internal performance it is expected that approximately 219,454 shares of the LTV 2011-2013 will vest in 2014 for senior
management and Executive Board.
The number, as corrected for the expected performance for the various awards, and weighted average share price per share under
the LTV of senior management and Executive Board are as follows:
Weighted
average share
price 2013
Number of
share rights
2013
Weighted
average share
price 2012
Number of
share rights
2012
Outstanding as at 1 January
35.42
1,357,826
29.14
1,546,514
Granted during the year
50.47
611,141
35.77
770,128
Forfeited during the year
40.52
(120,014)
35.44
(99,391)
Vested during the year
33.27
(331,768)
21.90
(615,967)
Performance adjustment
(260,079)
(243,458)
Outstanding as at 31 December
42.41
1,257,106
35.42
1,357,826
Under the extraordinary share plans for senior management 35,750 shares were granted and 9,942 (gross) shares vested. These
extraordinary grants only have a service condition and vest between 1 and 5 years. The expenses relating to these expected
additional grants are recognised in profit or loss during the vesting period. Expenses recognised in 2013 are EUR1.1 million
(2012: EUR1.1 million).
Matching shares, extraordinary shares and retention share awards granted to the Executive Board only are disclosed in note 35.
Heineken N.V. Annual Report 2013
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