Remuneration
REMUNERATION COMMITTEE
ADDITIONAL CONDITIONS
APPLICATION OF POLICY IN 2005
THE REMUNERATION POLICY
1. General
The responsibilities of the Remuneration Committee
include:
preparing proposals for the Supervisory Board concerning
the remuneration policies for the Corporate Executive
Board to be adopted by the General Meeting of
Shareholders;
preparing proposals concerning the remuneration of
individual members of the Corporate Executive Board; and
to be informed and to give an opinion on the level and
structure of compensation for senior personnel other than
members of the Corporate Executive Board.
The Remuneration Committee has four members. During
2005 the composition of the Remuneration Committee
changed. Until May 18, 2005, the members were Karel
Vuursteen, Chairman and Rene Dahan and Dr. Cynthia
Schneider. Karel Vuursteen and Dr. Cynthia Schneider
resigned from the Supervisory Board and, accordingly,
from the Remuneration Committee as of May 18, 2005.
At present, the members of the Remuneration Committee
are Derk Doijer, Chairman, Rene Dahan, Dr. Myra Hart
and Stephanie Shern, all of whom are members of the
Supervisory Board. (As of May 18, 2005 Benno
Hoogendoorn was appointed Chairman and he resigned as of
September 29, 2005. As of October 25, 2005 Derk Doijer
was appointed Chairman).
In 2005, the Remuneration Committee met nine times. The
CEO was invited to all of these meetings but did not attend
all meetings. The secretary of the Remuneration Committee
is from our Group Support Office Human Resources
Department.
The Remuneration Committee utilizes external and internal
advisers from time to time for advice and information. In
2005 external advisers were hired to provide professional
advice regarding our remuneration policy, remuneration
market practices, and short and long-term incentive plans
and practices. The Supervisory Board determines the
remuneration of the individual members of the Corporate
Executive Board within the limits of our remuneration policy.
Our remuneration policy, in accordance with the Dutch
Corporate Governance Code was adopted at the General
Meeting of Shareholders on March 3, 2004.
In 2005, the remuneration of Anders Moberg, Hannu
Ryöppönen (Mr. Ryöppönen resigned from the Corporate
Executive Board effective August 31, 2005) and Mr. Theo
de Raad (resigned from the Corporate Executive Board
effective January 7, 2005), differed from the remuneration
policy with regard to base salary and/or short-term bonus,
because of preexisting contractual arrangements.
See Notes 8 and 9 to the consolidated financial statements
included in the annual report for details on employment
agreements, individual remuneration and pensions for
members of our Corporate Executive Board.
In addition to the remuneration allocated to Corporate
Executive Board members, as set out in the remuneration
policy below, a number of additional arrangements apply.
These additional arrangements, such as expense allowances,
medical insurance and accident insurance, are in line with
practice in the Netherlands and the United States.
As from January 1, 2004, the term of the employment
agreement for newly appointed members of the Corporate
Executive Board has been set at four years. If the Company
terminates the employment agreement of any such newly
appointed member, the severance payment is in principle
limited to one year's base salary.
According to section 3.4 of the remuneration policy the
targets for the bonus of the members of the Corporate
Executive Board in financial year 2005 are 70% based
on a financial criterion (economic value added or "EVA"
improvement) and 30% based on personal performance
criteria as set by the Supervisory Board. The Supervisory
Board has determined the personal targets for each member
of the Corporate Executive Board.
1.1 The objective of the Company's remuneration policy
is to provide remuneration in a form that:
- top managers can be recruited and retained as a
member of the Corporate Executive Board of a major
international company; and
- rewards performance consistent with the Ahold
strategy.
1.2 According to our Articles of Association, the Supervisory
Board proposes and the General Meeting of
Shareholders adopts the general remuneration policy
to be allocated to Corporate Executive Board members.
The Supervisory Board makes this proposal after having
obtained the advice and recommendation of the
Remuneration Committee. External advisers will on
occasion be utilized to provide advice and information
to the Remuneration Committee to assist in the
development of the policy proposals.
AHOLD ANNUAL REPORT 2005 23
