o www.ahold.com/reports2009
Notes to the consolidated financial statements
32 Share-based compensation
-
-
Financials
In 2009, Ahold's share-based compensation program consisted of a conditional share grant program (Global Reward Opportunity -
"GRO"). This program, introduced in 2006, replaced the Company's share option plans. In addition, conditional shares were incidentally
granted to employees outside the GRO program as part of their remuneration. In principle, plan rules will not be altered during the term
of the plans. Total share-based compensation expenses were as follows:
million 2009 2008
GRO program
30
24
Other conditional shares
7
Share option plans
1
Total share-based compensation expenses
30
32
Ahold's share-based compensation programs are equity-settled. At January 3, 2010, the Company held 10,673,435 of its own shares for
delivery under share-based compensation programs (December 28, 2008: 15,202,890).
The grant date fair value of the shares granted under the GRO program in 2009 was €50 million, of which €5 million related to Corporate
Executive Board members. This fair value is expensed over the vesting period of the grants adjusted for assumed annual forfeitures of
6 percent (2008: 6 percent). For the share-based compensation expenses allocable to the individual Corporate Executive Board members,
see Note 31.
GRO program
Main characteristics
Under the GRO program, Ahold shares are granted through a mid-term (three-year) and a long-term (five-year) program. The number
of conditional shares to be granted depends on the at-target value, the annual incentive multiplier of the preceding year and the average
share price for six months preceding the date of the grant. The shares are granted on the day after the Annual General Meeting of
Shareholders and vest on the day after the publication of Ahold's full-year results in the third year (mid-term component) or fifth year
(long-term component) after the grant, provided the participant is still employed by Ahold. Shares granted to Corporate Executive Board
members vest after three years (mid-term component) or five years (long-term component), subject to continued employment. Corporate
Executive Board members are not allowed to sell their shares within a period of five years from the grant date, except to finance tax due at
the date of vesting. For participants other than the Corporate Executive Board members, the mid-term component of the program contains
a matching feature. For every five shares a participant holds for an additional two years after the vesting date, the participant will receive
one additional share.
The conditional shares granted through the long-term component are subject to a performance condition. The number of shares that will
ultimately vest depends on Ahold's performance compared to 11 other retail companies (refer to the "Remuneration" section of this
Annual Report for the composition of the peer group), measured over a five-year period using the Total Shareholder Return ("TSR", share
price growth and dividends). The table below indicates the percentage of conditional shares that could vest based on the ranking of Ahold
within the peer group:
Rank
1
2
3
4
5
6
7
8
9
10
11
12
Corporate Executive Board
150%
130%
110%
90%
70%
50%
25%
0%
0%
0%
0%
0%
Other participants
150%
135%
120%
105%
90%
75%
60%
45%
30%
15%
7.5%
0%
As of the end of 2009, Ahold held the first position with respect to the 2007 share grant, the second position for the 2006 share grant, the
fourth position for the 2008 share grant and the sixth position for the 2009 share grant. These positions are not an indication of Ahold's
final ranking at the end of the performance periods, nor do they provide any information related to vesting of shares.
Upon termination of employment due to retirement, disability or death, the same vesting conditions as described above apply. Upon
termination of employment without cause (e.g., restructuring or divestment), a pro rata part of the granted shares will vest on the date
of termination of employment.
Ahold Annual Report 2009 104
