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.

Jaarverslagen en Personeelsbladen Heineken

Jaarverslagen | 2018 | | pagina 56