Notes to the Consolidated Financial Statements (continued)
27. Share-based payments - Long-Term Variable Award
Report of the
Report of the
Annual Report 2016
HEINEKEN has a performance-based share plan (Long-Term Variable award (LTV)) for the Executive Board and senior management. Under this LTV
plan, share rights are conditionally awarded to incumbents on an annual basis. The vesting of these rights is subject to the performance of Heineken
NV on specific internal performance conditions and continued service over a three-year period.
The performance conditions for LTV 2014-2016, LTV 2015-2017 and LTV 2016-2018 are the same for the Executive Board and senior management
and comprise solely of internal financial measures, being Organic Revenue Growth, Organic EBIT beia growth, Earnings Per Share (EPS) beia growth
and Free Operating Cash Flow.
At target performance, 100% of the awarded share rights vest. At threshold performance, 50% of the awarded share rights vest. At maximum
performance, 200% of the awarded share rights vest for the Executive Board as well as senior managers contracted by the US, Mexico, Brazil
and Singapore, and 175% vest for all other senior managers.
The performance period for the aforementioned plans are:
LTV Performance period start Performance period end
1 January 2014
31 December 2016
1 January 2015
31 December 2017
1 January 2016
31 December 2018
The vesting date for the Executive Board is shortly after the publication of the annual results of 2016, 2017 and 2018 respectively and for senior
management on 1 April 2017, 2018 and 2019 respectively.
As HEINEKEN will withhold the tax related to vesting on behalf of the individual employees, the number of Heineken NV shares to be received will
be a net number. The share rights are not dividend-bearing during the performance period. The fair value has been adjusted for expected dividends
by applying a discount based on the dividend policy and historical dividend payouts, during the vesting period.
The terms and conditions of the share rights granted are as follows:
Based on share
Grant date/employees entitled Number* price
Share rights granted to Executive Board in 2014
Share rights granted to senior management in 2014
Share rights granted to Executive Board in 2015
Share rights granted to senior management in 2015
Share rights granted to Executive Board in 2016
Share rights granted to senior management in 2016
The number of shares is based on at target payout performance (100%).
Under the LTV 2013-2015, a total of 58,447 (gross) shares vested for the Executive Board and 726,789 (gross) shares vested for senior management.
The number of shares vested for the Executive Board relates to Mr. Jean-Frangois van Boxmeer, as Mr. René Hooft Graafland was no longer member
of the Executive Board at vesting and Ms. Laurence Debroux received LTI as per LTIP 2015-2017.
Based on the performance conditions, it is expected that approximately 786,093 shares of the LTV 2014-2016 will vest in 2017 for senior
management and the 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:
Number of share
share price 2015
Number of share
Outstanding as at 1 January
Granted during the year
Forfeited during the year
Vested during the year
Outstanding as at 31 December