Remuneration Report (continued)
Pay mix
CEO target pay mix 2018-2019
CFO target pay mix 2018-2019
Pensions
Compensation rights on termination of employment/service agreement
Loans
O Q,
Report of the Executive Board
Report of the Supervisory Board
The Supervisory Board has the power to revise the amount of performance shares that will vest to an
appropriate number if the number of performance shares that would have vested under the agreed
vesting schedule would be unacceptable according to standards of reasonableness and fairness.
The Supervisory Board is entitled to claw back all or part of the shares transferred to the Executive
Board members upon vesting (or the value thereof) insofar as vesting occurred on the basis of incorrect
information about achieving the performance conditions. The vested performance shares that remain
after withholding tax are subject to an additional holding restriction of two years, to arrive at a five-year
holding restriction after the date of the conditional performance grant.
As from the 2017 grant, the performance measure 'Organic Operating Profit beia Growth' replaced the
performance measure 'Organic EBIT beia Growth', as approved by the AGM on 20 April 2017. For the LTI
grants for the performance period 2015-2017 and the performance period 2016-2018 the original EBIT
targets remained in place.
The mix between fixed pay and variable pay for various levels of performance is illustrated below. In these
charts, fixed pay refers to base salary only, excluding pensions and other emoluments, and variable pay
consists of the aforementioned Short-term and Long-term incentive opportunities, including the 'deferral-
and-matching' proposition. Share price movements during performance and holding periods are hereby not
included since these are unknown in the context of target remuneration.
Below threshold performance At threshold performance
At target performance At/beyond max performance
Below threshold performance At threshold performance
Fixed pay Variable pay
At target performance At/beyond max performance
Financial Statements
Sustainability Review
Heineken N.V. Annual Report 2018
Other Information
The members of the Executive Board participate in a defined-contribution Capital Creation Plan. As of
2015, following pension reforms in the Netherlands, new members of the Executive Board receive the
same contribution as new top executives under Dutch employment contract below the Executive Board,
which is currently 18% of base salary. This applies to our current CFO who became an Executive Board
member in 2015. For the CEO the same capital creation arrangement as for 2014 remained in force, since
the existing top executives below the Executive Board at that time were compensated on an individual
basis for part of the impact of the aforementioned pension reforms. The contribution to the CEO therefore
remains an age-dependent percentage of base salary and STI payout. Both Executive Board members
have chosen to receive their full pension contributions as taxable income, as opposed to applying tax
deferral to the maximum amount possible.
If the Company gives notice of termination of the employment agreement of Mr. Van Boxmeer for a
reason which is not an urgent reason ('dringende reden') within the meaning of the law, the Company
shall pay severance compensation to Mr. Van Boxmeer on expiry of his employment agreement.
This severance compensation shall be set on the basis of the notion of reasonableness taking into
account all the circumstances of the matter, including whether Mr. Van Boxmeer shall be bound by a
non-competition obligation and whether any allowance is paid by the Company in relation to this non
competition obligation. In case of dismissal for cause ('ontslag met gegronde reden') whereby the cause
for dismissal concerns unsatisfactory functioning of Mr. Van Boxmeer, the severance compensation
cannot exceed one year's base salary.
If the Company gives notice of termination of the service agreement of Mrs. Debroux for a reason which
is not an urgent reason ('dringende reden') within the meaning of the law, or decides not to extend the
service agreement upon its expiry, or if the AGM does not re-appoint Mrs. Debroux as member of the
Executive Board for a subsequent term, the Company shall pay Mrs. Debroux an amount equal to two
years of base salary or one year of base salary, depending on whether such termination occurs during
or upon expiry of Mrs. Debroux's first four-year term (ending on 25 April 2019), or any subsequent term
respectively. At the time, this agreement with Mrs. Debroux was made in line with the best practice
provisions of the 2008 Dutch Corporate Governance Code. Under the revised 2016 Code, the requirements
regarding severance payments are more stringent and as such the Company does not, strictly speaking,
comply with best practice provision 3.2.3 during her first term. If on 25 April 2019 the AGM approves
the proposal by the Supervisory Board to nominate Mrs. Debroux for re-appointment as member of the
Executive Board then the Company will comply with the 2016 Code requirements henceforth.
HEINEKEN does not provide loans to the members of the Executive Board.
