S
Notes to the Consolidated Financial Statements (continued)
6.5 Share-based payments
O Q,
Heineken N.V. Annual Report 2018
Report of the Executive Board
Report of the Supervisory Board
Financial Statements
Sustainability Review
Other Information
In millions of
Note
2018
2017
Wages and salaries
2,444
2,339
Compulsory social security contributions
386
364
Contributions to defined contribution plans
51
47
Expenses/(income) related to defined benefit plans
9.1
105
59
Expenses related to other long-term employee benefits
(9)
3
Equity-settled share-based payment plan
6.5
48
55
Other personnel expenses
724
683
3,749
3,550
Accounting policies
Personnel expenses are recognised when the related service is provided, for more details on accounting
policies related to post-retirements obligations and share-based payments refer to note 9.1 and
6.5 respectively.
HEINEKEN has the following share-based compensation plans: Long-term incentive plan, Matching share
plan (as part of the Short term incentive plan) and Extraordinary share plan.
Long term incentive plan (LTIP)
HEINEKEN has a performance-based Long-term incentive plan (LTIP) for the Executive Board and senior
management. Under this LTIP, share rights are conditionally awarded to participants on an annual basis.
The vesting of these rights is subject to the performance of Heineken N.V. on specific internal performance
conditions and continued service over a three calendar year period by the employee.
The performance conditions for LTIP are Organic Net Revenue growth, Organic EBIT beia growth, Earnings
Per Share beia growth and Free Operating Cash Flow for LTIP 2016-2018. As per LTIP 2017-2019 Organic
EBIT beia growth changed into Organic Operating Profit beia growth.
At target performance, 100% of the awarded share rights vest. At threshold performance, 50% of the
awarded share rights vest and 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. As from LTIP 2017-2019 the maximum performance is set at 200% for
all senior managers.
The grant date, fair market value (FMV) at grant date, service period and vesting date for the
aforementioned plans are visualised below:
Overview LTIP
LTI Plan
31-12-2015
31-12-2016
31-12-2017
31-12-2018
31-12-2019
31-12-2020
2016-2018
grant date
FMV €75.20
performance period
vesting date
2017-2019
grant date
FMV €66.88
performance period
vesting date
2018-2020
grant date
FMV €82.46
performance period
vesting
date
Total LTIP expenses
recognised in 2018
