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Remuneration Report 2020
Labour market peer group
Base salary
Short-term incentive
Heineken N.V.
Annual Report 2020
Introduction
Report of the
Executive Board
Report of the Financial
Supervisory Board Statements
Sustainability
Review
Other
Information
Remuneration
element
Description
Strategic role
Long-term
incentive
Is based on achievements of three-year financial
targets for Heineken N.V.
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
before-tax Long-term incentive amount)
Vested shares are blocked for another two years,
to arrive at a five-year holding restriction after the
date of the conditional performance grant
Drives and rewards sound
business decisions for the
long-term health of HEINEKEN
Aligns Executive Board and
shareholder interests
Supports Executive
Board retention
Pensions
Defined Contribution Pension Plan and/
or Capital Creation Plan
Provides for employee welfare
and retirement needs
Benefits
Provides a range of benefits, including, but not limited
to, company car, fuel and health insurance
Aims to be in line with local market practice
Provides market competitive
benefits to aid retention
A global labour market peer group was adopted by the AGM in 2011, and subsequently adjusted in 2012 and
2017. 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 2020 (and 2019), the peer group consisted
of the following companies:
Anheuser-Busch InBev (BE) Diageo (UK)
Nestlé (CH)
Carlsberg (DK)
Henkel (DE)
Pepsico (US)
Coca-Cola (US)
Kimberley-Clark (US)
Pernod Ricard (FR)
Colgate-Palmolive (US) Mondelez International (US)
Unilever (NL)
Danone (FR)
L'Oréal (FR)
Every year, peer group and base salary levels are reviewed, and the Remuneration Committee may propose
adjustments to the Supervisory Board. HEINEKEN aims to compensate at median on target remuneration of
the peer group. However, when changes in base salary are considered, broader factors are taken into account,
including but not limited to the individual and business performance and the internal pay relativities.
The Short-term incentive (STI) is designed to drive and reward the achievements of HEINEKEN's annual
performance targets. Through its payout in both cash and investment shares it also drives and rewards
sound business decisions for HEINEKEN's long-term health while aligning Executive Board and shareholder
interests at the same time. The target STI opportunities for 2020 are 140% of base salary for the CEO and
100% of base salary for the CFO. These percentage opportunities are well aligned with the labour market peer
group medians.
The STI opportunities are for a weighted 75% based on financial and operational measures for Heineken N.V.,
and for a weighted 25% on individual leadership measures. At the beginning of each year, the Supervisory
Board establishes the performance measures, their relative weights and corresponding targets based on
HEINEKEN's business priorities for that year. The Supervisory Board ensures that a balanced mix of financial,
operational and individual performance measures is selected, which incentivises executives to achieve our
annual business strategy and the growth of shareholder value. The financial and operational measures and
their relative weights are reported in the Remuneration Report upfront; the numerical performance targets
themselves are not disclosed as they are considered to be commercially sensitive. In the first weeks of the
following year, the Supervisory Board reviews the Company and individual performance against the pre-set
targets, and approves the STI payout levels based on the performance achieved. The performance on each of
the measures is reported in qualitative terms in the Remuneration Report after the end of the performance
period. The STI payout for 2020 is subject to four performance measures: Organic Net Revenue Growth
(weight: 35%), Organic Net Profit beia Growth (weight: 15%), Free Operating Cash Flow (weight: 25%) and
Individual Leadership measures (weight: 25%). The Individual leadership measures are a mix of quantitative
and qualitative measures focused on the implementation of HEINEKEN's strategy. The 2020 individual
leadership measures were selected in line with our ambition to contribute to an inclusive and sustainable
economy and society.
For 2021 the individual leadership objectives will be tied to achievement of our EverGreen strategy which
includes sustainability and social goals.
