Remuneration Report continued
Reportofthe Reportofthe Financial Other
Contents Overview Executive Board Supervisory Board Statements Information
Summary overview of remuneration elements
The Executive Board's remuneration policy is simple and transparent in design, and consists of the following key elements:
Remuneration element
Description
Strategic role
Base salary
Short-term variable pay
Long-term variable award
Pensions
Involves fixed cash compensation
Aims for the median of the labour market peer group
Is based on achievements of annual measures, of which
a weighted 75 per cent relate to financial and
operational measures for Heineken N.V. and 25 per cent
to individual leadership measures
Aims, at target level, for the median of the labour
market peer group
Is partly paid in cash, and partly in investment shares
with a holding restriction of five calendar years:
- the part paid in shares is between 25 and 50 per
cent of the full gross pay, depending on the
individual's choice
- the part in cash is paid net of taxes (i.e. after
deduction of withholding tax due on the full
gross pay)
Investment shares are matched on a 1:1 basis after
the holding period
Is based on achievements of three-year financial
targets for Heineken N.V. as specified on page 54
Aims, at target level, for the median of the labour
market peer group
Is awarded through the vesting of shares, net of taxes
(i.e. after deduction of withholding tax due on the full
gross award)
Vested shares are blocked for another two years, to
arrive at a five-year holding restriction after the date
of the conditional performance grant
Defined Contribution Pension Plan and/or Capital
Creation Plan
Facilitates attraction and is the basis for
competitive pay
Rewards performance of day-to-day activities
Drives and rewards annual HEINEKEN performance
Drives and rewards sound business decisions for the
long-term health of HEINEKEN
Aligns Executive Board and shareholder interests
Drives and rewards sound business decisions
for the long-term health of HEINEKEN
Aligns Executive Board and shareholder interests
Supports Executive Board retention
Provides for employee welfare and retirement needs
Labour market peer group
A global labour market peer group was adopted by the AGM in 2011and subsequently adjusted in 2012. The median target remuneration of this peer
group is a reference point for the target remuneration of the CEO and CFO. Each year, the Remuneration Committee validates the peer group to ensure
relevance, and recommends adjustments to the Supervisory Board if needed. For 2015, the peer group consisted of the following companies, which will
basically apply to 2016 as well, with the understanding that Philips may need to be replaced after its separation from its Lighting business in 2016, and
SABMiller may need to be replaced after its acquisition by Anheuser-Busch InBev:
Anheuser-Busch InBev (BE)
Carlsberg (DK)
Coca-Cola (US)
Colgate-Palmolive (US)
Danone (FR)
Diageo (UK)
Henkei (DE)
Kimberley-Clark (US)
Mondelez International (US)
L'Oréal (FR)
Pepsico (US)
Pernod Ricard (FR)
Philips (NL)
SABMiller (UK)
Unilever (NL)
52 Heineken N.V. Annual Report 2015
