64
Remuneration Report 2023
Introduction
CEO target pay mix 2023
22%
78%
Threshold
Maximum
-32.0
-38.0
8.33
-12.0
-15.0
-18.0
in 2025
8.33
28.0
30.0
32.0
73%j
Variable pay
Fixed pay
Organic Net Revenue Growth (25%)
To drive top line growth
Earnings Per Share (EPS) beia Growth (25%)
To drive overall long-term Company performance
Free Operating Cash Flow (25%)
To drive focus on cash
ESG measures (25%)
To drive the Sustainability Responsibility agenda
In the first weeks following the end of the performance period, the Supervisory Board reviews the Company’s
performance against the pre-determined targets and approves the LTI vesting based on the performance
achieved. The performance on both the financial and ESG-related measures will be reported on actual measure
achievement results (cf. Part III).
Maximum performance
200% of performance shares vests.
For each performance measure, a threshold, target and maximum performance level are set with the following
performance share vesting schedule:
Threshold performance
50% of performance shares vests
Target performance
100% of performance shares vests
Sustainability
Review
Report
of the
Supervisory
Board
Other
Information
Financial
Statements
Report
of the
Executive
Board
Long-term incentive
The Long-term incentive (LTI) is designed to drive and reward sound business decisions for HEINEKEN’s long
term health, and to align the Executive Board with shareholder interests by linking rewards to HEINEKEN’s share
price performance. The target LTI opportunities for 2023 at grant are 150% of base salary for the CEO and
125% of base salary for the CFO.
Each year, a target number of performance shares is conditionally granted based on the target LTI opportunity
percentage of that year, the base salary of that year, and the closing share price of 31 December of the
preceding year.
HEINEKEN’s strong and long-standing ambition regarding Sustainability Responsibility is clearly reflected in
our EverGreen strategy and related Brew a Better World ("BaBW") commitments. A set of ESG-related
performance measures was introduced to the Long-term incentive plan in 2022, directly linking the Executive
Board’s long-term remuneration with HEINEKEN’s Sustainability Responsibility strategy. Three BaBW
commitments are included as performance measures: carbon emissions reduction, water efficiency
improvement, and women at senior manager level.
The vesting of the performance shares is contingent on HEINEKEN’s performance over a period of three years
on a list of performance measures below.
The three financial performance measures and the combined ESG -related measures have equal weight to
minimise the risk that executives over-emphasise one performance measure to the detriment of others. At the
beginning of each performance period, the Supervisory Board establishes the corresponding numerical targets
for these performance measures based on HEINEKEN’s business priorities. The numerical targets for the three
financial performance measures are not disclosed upfront as they are considered to be commercially sensitive.
The ESG measures and corresponding performance targets for the 2023-2025 Long-term incentive were set in
line with our Brewing a Better World ambitions. They are as follows:
Below threshold
performance
At threshold
performance
At threshold
performance
At target
performance
At target
performance
At/beyond max
performance
At/beyond max
performance
Heineken
N.V.
Annual
Report
2023
Weight
8.33
Target1
-35.0
Below threshold
performance
CFO target pay mix 2023
ESG Measures
Carbon emissions reduction in production vs 2022 baseline
Water efficiency improvement vs 2018 baseline
Women at senior manager level
1 Target to have been achieved at the end of the 2023-2025 performance period.
For each measure, vesting in between these performance levels is on a straight-line basis; below threshold
performance the vesting is zero, whereas beyond maximum performance it is capped at 200% of vesting
at target.
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.
Pay mix
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.
36%
66%
12% 4
88%
62%
58%
15% j
85W
100%
100%
27%
