Remuneration
General
This section sets out the remuneration policies for the
Corporate Executive Board members. The remuneration
policy is prepared in accordance with the Dutch Corporate
Governance Code and was adopted at the General Meeting
of Shareholders on May 18, 2006 as required by the
Dutch Corporate Governance Code. This section starts
with the responsibilities and activities of the Remuneration
Committee, followed by the Corporate Executive Board
members' remuneration for 2006. Information on additional
arrangements, employment agreements and an outlook
on the remuneration policy for 2007 is also included.
Further details on employment agreements, individual
remuneration, pension, shares and other interests in the
Company for the members of the Corporate Executive Board
are outlined in Notes 8 and 9 to the consolidated financial
statements included in this Annual Report.
Remuneration Committee
The main 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
Advising 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
2006, the composition of the Remuneration Committee
changed. Until May 18, 2006, the members were Derk
Doijer, appointed as Chairman of the Remuneration
Committee, Réne Dahan, Dr. Myra Hart and Stephanie
Shern. René Dahan resigned from the Remuneration
Committee on May 18, 2006. He was replaced by Judith
Sprieser who was appointed as a member of the Supervisory
Board and the Remuneration Committee as of May 18,
2006. At present, the members of the Remuneration
Committee are Derk Doijer, Chairman, Dr. Myra Hart,
Stephanie Shern and Judith Sprieser, all of whom are
members of the Supervisory Board.
In 2006, the Remuneration Committee met six times.
The Remuneration Committee utilizes internal and external
advisors for market data and updates on recent
developments. In 2006, external advisors were hired to
provide professional advice regarding the remuneration
policy, market practices and short- and long-term incentive
plans. Ultimately, the Supervisory Board determines the
level and composition of the remuneration components for
the individual members of the Corporate Executive Board.
The remuneration policy 2006
Ahold's remuneration policy is focused on Total Direct
Compensation. Total Direct Compensation is benchmarked
against a peer group set of companies identified as relevant
to the Company.
Total Direct Compensation
The basic elements of the Total Direct Compensation
provided to Ahold's Corporate Executive Board members
are (1) a base salary, (2) an annual cash incentive and
(3) a long-term, equity-based program. An important
component of the overall remuneration package is the
pension benefit. The pension benefit is not included in
the Total Direct Compensation.
The peer group used for reference
The peer group used to assess the competitiveness of the
overall remuneration provided to the Corporate Executive
Board and to benchmark the performance of the Company
reflects the geographical areas in which the Company
operates and the markets most relevant with respect to
the recruitment and retention of top management for the
Company. Furthermore, the peer group companies are
selected based on relevant size, public listing and number
of shares outstanding.
Ahold Annual Report 2006 19
