o www.ahold.com/reports2009
Remuneration - continued
Pension and other contract terms
Outlook remuneration policy
Governance
Five-year component
The shares conditionally granted (with a performance hurdle at both grant and vesting)
under this component vest at the end of the performance period of five years. Performance
at vesting is measured using TSR (share price growth and dividends paid over the
performance period) as benchmarked against the TSR performance of the peer group.
The number of shares that vest depends on Ahold's ranking within the peer group.
No shares will vest if Ahold ranks below the seventh position of the peer group, which
consists of 12 companies (including Ahold). The table below indicates the percentage
of conditional shares that could vest based on Ahold's ranking within the peer group.
Corporate Executive Board Members
Rank Rank Rank Rank
1
150%
4
90%
7
25%
10
0%
2
130%
5
70%
8
0%
11
0%
3
110%
6
50%
9
0%
12
0%
An independent external advisor determines the ranking based on TSR performance
against the peer group.
Pension
The pension plan for Corporate Executive Board members is identical to the pension
provision for all other employees of Ahold in the Netherlands and is referred to as a career
average pension plan. For every service year at Ahold, a pension amounting to 2.25 percent
of the pension-bearing base salary will be granted. The normal retirement age is 65. Under
this plan, each Corporate Executive Board member pays a pension premium contribution
of approximately 1 percent of his or her pension-bearing salary. Upon appointment to the
Corporate Executive Board, Chief Financial Officer Kimberly Ross and Chief Operating
Officer Ahold USA Larry Benjamin continued their participation in the U.S. pension plan.
Other contract terms
Loans
Ahold does not provide loans to members of the Corporate Executive Board. There are no
loans outstanding.
Additional arrangements
In addition to the remuneration allocated to Corporate Executive Board members, a number
of additional arrangements apply. These include expense allowances, medical insurance
and accident insurance, and are in line with standard practice in the Netherlands.
Employment agreements
The term of appointment for all Corporate Executive Board members is set at four years.
The term of employment is equal to the term of appointment, unless the Corporate
Executive Board member is reappointed for another term or was already employed by
Ahold immediately prior to the appointment. In both cases the term of employment is
indefinite. If the Company terminates the employment agreement of any member of the
Corporate Executive Board, the severance payment is limited to one year's base salary.
The same applies if an initial employment agreement for four years is not continued
because the Corporate Executive Board member is not reappointed. The employment
agreements may be terminated by Ahold with a notice period of 12 months, and by the
Corporate Executive Board member with a notice period of six months.
No major changes to either the policy or the design of the incentive programs are
suggested for 2010.
