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Notes to the Consolidated Financial Statements
6.4 Personnel expenses
6.5 Share-based payments
Q Heineken N.V. Report of the Report of the Financial Sustainability Other
Annual Report 2020 Introduction Executive Board Supervisory Board Statements Review Information
The average number of full-time equivalent (FTE) employees, excluding contractors, in 2020 was 84,394
(2019: 85,853 FTE), divided per region as follows:
Average number of FTE per region
40,000
30,000
H
P-
o
20,000
Z
10,000
28,566 29,045
32,601 32,694
14,142 14,375
I
Europe
Africa, Middle East
Eastern Europe
The decrease in Asia Pacific is mainly due to the full year impact on FTEs related to the 2019 disposal of
HEINEKEN's operating entities in China and Hong Kong. In Europe, the decrease is due to a hiring freeze
implemented in the current year.
A total of 4,218 FTEs are based in the Netherlands (2019: 4,120 FTE). The increase in FTEs based in the
Netherlands during 2020 is due to the conversion of temporary roles into permanent roles.
As a result of the COVID-19 pandemic, HEINEKEN received government grants related to personnel expenses
in various countries amounting to €49 million, including furlough arrangements for 1,573 FTEs.
HEINEKEN employees receive compensations such as salaries and wages, pensions (refer to note 9.1) and
share-based payments (refer to note 6.5). Other personnel expenses include expenses for contractors of
€128 million (2019: €183 million) and restructuring costs of €343 million (2019: €84 million). The increase
in the restructuring expenses of €259 million is related to the productivity programme part of EverGreen.
Refer to note 9.2 for the restructuring provisions.
In millions of
Note
2020
2019
Wages and salaries
2,228
2,536
Compulsory social security contributions
367
386
Contributions to defined contribution plans
51
58
Expenses related to defined benefit plans
9.1
104
78
Expenses related to other long-term employee benefits
7
12
Equity-settled share-based payment plan
6.5
(1)
31
Other personnel expenses
913
779
3,669
3,880
Accounting policies
Personnel expenses
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.
Government grants
Governments grants relating to certain deferred costs or costs yet to be incurred are capitalised and released
to profit or loss in the respective periods in which the costs are recognised.
HEINEKEN has the following share-based compensation plans: Long-term incentive plan, Extraordinary
share plan and Matching share plan (as part of the Short-term incentive plan of the Executive Board).
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 share rights are not
dividend-bearing during the performance period.
The performance conditions for LTIP are organic net revenue growth, organic operating profit beia
growth, earnings per share beia growth and free operating cash flow. The performance conditions are
equally weighted.
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.
