65
Remuneration policy 2011
Ahold
Annual Report 2011
Groupata glance
Performance
(Governance
Financials
Investors
Remuneration continued
Ahold's remuneration policy is focused on Total Direct Compensation, which is benchmarked
against a pre-defined peer group.
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, which is not regarded as a component of Total Direct Compensation.
Peer group
The peer group used to assess the competitiveness of the overall remuneration provided to
the Corporate Executive Board is the same as that used to benchmark the performance of the
Company. This peer group reflects Ahold's geographic operating areas and the markets most
relevant in relation to the recruitment and retention of top management. In addition, market
practice in the Netherlands is considered, and peer group companies are selected based on
relevant size, public listing, and liquidity of shares.
Wal-Mart Stores, Inc. Costco Wholesale Corporation SuperValu Inc.
Carrefour S.A. The Kroger Co. Delhaize Brothers and Co.
Metro A.G. Target Corporation (Delhaize Group)
Tesco PLC Safeway Inc. Staples, Inc.
To anticipate changes to the peer group, a short list of substitutes has been defined. In selecting
the most appropriate replacement, the Supervisory Board uses the same criteria as were used to
select the companies in the current peer group.
Base salary
The composition (risk profile) of the existing Total Direct Compensation levels is taken into
account when benchmarking base salary levels. The target Total Direct Compensation level
is typically around the 50th percentile.
Annual cash incentive plan
The Corporate Executive Board's annual cash incentive plan uses three equally weighted
measures: net sales growth, operating margin, and Return on Net Assets (RoNA). The at-target
payout as a percentage of base salary is 100 percent, contingent on full achievement of the
individual's objectives, with a cap at 125 percent of the base salary. Ahold does not disclose the
required performance levels of the measures, as this is considered commercially sensitive
information. A claw back provision is embedded in the rules of the Annual Incentive Plan.
Equity-based program: Global Reward Opportunity
Under the Global Reward Opportunity (GRO) program, conditional shares are granted through
three- (with a performance hurdle at grant) and five-year (with a performance hurdle at grant and
vesting) programs. In principle, plan rules will not be altered during the term of the plan.
The Supervisory Board has set the target value to be granted under GRO for the members of the
Corporate Executive Board at 150 percent of base pay. The number of conditional shares to be
granted is determined by the at-target value of the grant, the annual cash incentive plan multiplier
of the preceding year and the average share price during the six months preceding the date of
grant. For example, assuming an at-target grant value of €100,000 and an annual incentive
multiplier for the preceding year of 0.8, the value to be granted would be 0.8 x €100,000
€80,000. Assuming, furthermore, a six-month average share price preceding the date of grant
of €8.00, the number of shares to be conditionally granted would be 10,000. Of these 10,000
shares, 5,000 would be granted through the three-year component and 5,000 through the five-
year Total Shareholder Return (TSR)-related component. If the annual incentive multiplier is zero,
50 percent of the grant value at target would be granted through the five-year program only.
